Decatur Takes Advantage of Georgia’s “Booming” Film Industry
Decatur Metro | December 8, 2010The AJC reports that the film industry will bring in an estimated $1.3 billion into the state this year, thanks in large part to a our relatively new tax breaks that provide up to 30% tax credits to film companies.
And business-friendly Decatur has become a model of efficiency in getting permits approved and coordinating with the police and fire department to close streets, etc. The AJC has this testimonial from a veteran location scout, Mark Cortell, who worked on “Mean Girls 2″, which filmed in Decatur over the summer.
“They’ll tell you yes or no,” Cottrell said of the city. “If they say no you can move on. You know where you stand.”
Decatur posts filming rules on the city website and usually requires a production company to obtain just one permit, though it has to work out street closures with the police, said Katie Abel, city special events coordinator. The city has issued 14 permits this year for feature films, TV movies and commercials.
There’s certainly little shock-value in learning that Decatur is going to great lengths to create a smooth process for film companies, so I’m not gonna really pursue that line of discussion.
However, I do think it’s interesting that we get this concrete example of tax cuts benefiting the state economy on the same day it’s announced that Gov-Elect Nathan Deal announced that he favors cutting corporate taxes once he’s in office.
“Whether we like it or not, corporate taxes are a factor in businesses deciding where they’re going to locate, whether they’re going to expand,” he said. “These are jobs that hang in the balance depending on what direction we take.”
Deal was not concerned by comments from several tax council members last week implying that cuts to the corporate income tax would have little effect on job creation.
Which again raises the age-old question: Do tax cuts spur job growth or eliminate vital services?
If there was a blanket answer, which only I knew the answer to, I’d start my own country!
Here’s one take on the tax situation:
http://blogs.ajc.com/jay-bookman-blog/2010/12/07/a-one-stop-history-lesson-in-federal-taxes/
Good golly! 687 Comments over there! Did you weigh in? If so, we can all play the “Spot Steve!” game! :0)
My take on Nathan Deal favoring a corporate tax cut: #@!%$$#!&% !!!!!
You can cease the detective work – I did not and will not comment. IMO, most of the folks who comment on Jay’s blog are repeat offenders who only read his blogs so they can get off on something. Things like hard facts are something they don’t want to deal with.
Yeah, and some of the nastier commenters are also commenters here– but they know better, so they mind their manners when posting to DM. A couple of them forget themselves from time to time, but still…just goes to show that young’uns will mostly behave if they know they’ll get a switchin’ for acting up!
Ooooooh! Spill! Same names?!
Nah, no need to out them here– they know who they are, and if you peruse the Opinion blogs on the AJC often enough (particularly Jay Bookman’s), you’ll see them. They have the same user names they go by on this one.
New game: “Say WHAT?!?” Jot down best guesses on who/ what they said… Naw. Too easy. We’ve read it all before on here.
Don’t know how y’all do it– reading the AJC comments! More than a quick scan & I get spittin’ mad!
Probably ONLY for YOUR take on things would I slog through that mess! It’d be a hoot to see what your alias would be! (The names are funny! The foolishness though…!)
Being in the industry, having the productions come to Georgia is a good thing. But, the issue is that the companies that come here are not required to hire locals. Yes, locals are getting some of the work, but with no requirement, a lot of us that are in the more specialized positions are often left out or get little work. Some states require that a percentage of the crew has to be local in order to get the tax cuts, but Georgia doesn’t fall in that category.
As far as bringing money into the area, yes, tv/film does raise revenue for local businesses, especially hotels and restaurants. I think if the tax incentives were rewritten with a clause that they had to hire locals, it would be a win all around.
What Deal chooses to ignore, is that in addition to low corporate taxes, relocating companies actually care about things like the quality of education because it impacts their ability to attract the best employees. So if we want GOOD jobs in Georgia, it would help to have GREAT schools. If we want to pursue a low-end job creation strategy, then by all means let’s race to the bottom.
They also care about transportation, which is another place that metro Atlanta in particular lags in. Deal’s transition director is the executive director of the Georgia Public Policy Foundation, a notoriously pro-road, anti-any-other-form-of-transportation outfit.
I really don’t see anything more happening in the next four years than happened in the last eight.
Which again raises the age-old question: Do tax cuts spur job growth or eliminate vital services?
_______
In our current world of borrow, borrow, borrow, the answer is neither. Just look at the tax deal currently on the table — we will keep current tax rates but, as a condition, also extend jobless benefits. Thus, the trade-off isn’t necessarily less revenue for more services. It is less revenue for MORE services.
Rest assured, services will eventually be cut. But not by politicians. The bond market will force the cuts, and painfully at that.
What will eventually trigger the bond market? (I’m assuming you’re hearkening to a drop of the Feds credit rating?)
Does it have to do with the ratio of interest payments to revenue? Because I found this on NYT…
For now, the United States debt remains affordable, Moody’s said, as the ratio of interest payments to revenue fell to 8.7 percent in the current year, after peaking at 10 percent two years ago. If that trend were to reverse, the Moody’s analysts said, “there would at some point be downward pressure on the Aaa rating of the federal government.”
And then this on Wikipedia…
Budgeted net interest on the public debt was approximately $240 billion in fiscal years 2007 and 2008. This represented approximately 9.5% of government spending. Interest was the fourth largest single budgeted disbursement category, after defense, Social Security, and Medicare.[68] Despite higher debt levels, this declined to $189 billion in 2009 or approximately 5% of spending, due to lower interest rates. Average interest rates declined due to the crisis from 1.6% in 2008 to 0.3% in 2009.[69]
No, not necessarily a drop on the credit rating. Investors may lose confidence well before the ratings agencies drop the official rating, which is next to meaningless anyway. Moody’s is the same outfit that in 2008 was rating mortgage-backed securities as triple A. So many investors really don’t care what the rating is anyway.
One of your links did not work, but note that interest on existing debt is not nearly the entire story because it doesn’t account for the fact that we are borrowing to finance current operations at a substantial rate. Thus, interest payments are going to go up over time, as we are incurring over a trillion in new debt every year. The bond market does not care what total interest obligations were in 2007, before TARP, the stimulus, quantitative easing, etc. That’s old information that does not matter when you are buying a 5, 10, or 30 year T-bill today. And the latest news — that we’re going to add another $900 billion onto the debt pile through this tax deal — certainly isn’t changing our creditworthiness for the better.
I can’t tell you when and if things will turn. The bond market is not predictable like that. Confidence can evaporate overnight; one day you can sell T-bills, the next day you can’t (or can sell them only by offering huge interest rates).
Let’s see-the film industry can’t function without tax credits. Cakes and Ale can’t remodel without tax credits. Farmers can’t farm without tax credits.
Everybody wants somebody else to pay their fair share, just not them. If nobody pays taxes, then who educates the kids and patches the roads?
AMB,
Eliminate the tax credits across the board and switch to the Fair Tax. The revenue stays the same but the taxes are transparent to all….
and you call yourself skeptic?
See here for another take on the issue:
http://www.gppf.org/article.asp?RT=&p=pub/Taxes/Incentives090710.htm
The article suggests that Louisiana, which previously had a rich tax credit like Georgia’s, found it never recovered the money spent on the tax breaks:
“The chief economist for Louisiana’s legislative fiscal office, Greg Albrecht, estimates that in 2006, Louisiana gave the entertainment industry about $121 million in tax credits, but that only around 18 percent of that money was ever recovered in economic activity and taxes. He denounced the programs as “an expensive way to create jobs,” maintaining that “there’s no way you can say this makes money for the public.””
I think it’s exciting to have film projects in Georgia, but if the tax credit can’t pay for itself, it’s not a good idea. That said, I would think it would be hard to measure how much revenue the publicity and tourism that could be created by a popular movie, like “Midnight in the Garden of Good and Evil,” could ultimately create.
The net positive or net negative nature of filming depends on where you draw the line. Let’s say the findings you refer to are accurate and that they’re transferable to Georgia’s situation. That is, let’s say the state program doesn’t come close to recouping what it gives away. That still leaves the issue of where filming actually takes place and the impact on those specific spots.
I know people like to think in a nice “we’re all in this together” Kumbaya kind of way but the truth is that community building is a competition with every other community. Every bit of investment a municipality gets is at the expense of other communities where it didn’t go. So, communities (at the micro level) can still win (in terms of capturing sales tax bumps, temporary employment, etc. associated with filming) if they’re attractive to filmmakers (as Decatur appears to be).
That requires having the easy process filmmakers want, but it also requires having a community that looks good on film, with lots of diverse, shootable locations. It’s not like you see things getting shot in Snellville (for example) with the same regularity as Decatur (or at all).
Which is all to say that Decatur has a competitive advantage and we can continue to benefit locally, even if the impact on the state is a negative. That may not make it wise in the big picture but we as a city need to play the hand we’re dealt. The state sets the context; it’s up to us to either take advantage of it or not.
I bet the Coen Brothers could shoot a darn good film in Snellville.
It would take nothing less than the Coen brothers to make a good movie in Snellville.
Nobody likes to pay taxes, but if you want your kids to actually learn and not just have a baby sitter with a degree watching them because there’s too many kids in a classroom that makes it impossible to teach. Or the comfort that if your house caught on fire or you were in a serious accident that police and fire would be there to help. People forget where that money comes from.
Back to the film industry credits for a second. The breaks are only on the production, the actual filming, so there’s not incentive for them to edit or do any kind of post work in Atlanta. While a movie/tv show may film here from a few days to maybe a month, the post production on projects takes a lot longer, once again, no incentive for it to stay here and no wording that says they have to hire locals. As much as I’m not in favor of tax cuts, if they are structured right and as the opening post stated about creating jobs. If the companies got a tax break only if there was a provision that stated they had to hire a percentage of locals, I could see that as a plus. Otherwise, they get their tax breaks and run.
[...] to my main point, Decatur Metro commented on one of the AJC‘s recent pieces, highlighting the portions about Decatur’s [...]
[...] to my main point, Decatur Metro commented on one of the AJC‘s recent pieces, highlighting the portions about Decatur’s speedy, [...]