Speaking of tax breaks (see previous post), it looks like (who would have guessed) that one of Jim Amann’s talking points doesn’t bear close examination. The last time I saw our hapless (or is that hopeless) here, he was bragging about this efforts to make Connecticut Hollywood East. Apparently, he’s merely helped make Connecticut another Hollywood Sucker:
Many states that are cutting spending on schools, roads and other basics have been lavishing hundreds of millions of dollars in incentives on Hollywood studios to lure TV and movie productions — this, despite scant evidence that taxpayers come out ahead on such deals.
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Connecticut’s revenue department, for example, found in 2007 that every dollar in tax credits generated only 20 cents in new tax revenue. Connecticut gave away an estimated $70 million in tax revenue that year.
“The credit does not ‘pay for itself,'” Jennifer Weiner, a policy analyst for the New England Public Policy Center at the Federal Reserve Bank of Boston, wrote in a January report about Connecticut’s incentives. “Increases in economic activity spurred by the film credit generate some additional tax revenue for the state from a variety of sources. This additional revenue is likely to offset some, but not all, of the initial cost of the credit.”
The article also points out that, contrary to Amann’s claims, the in-state jobs created are short lived and not all that lucrative.
It also appears that we have plenty of competition in the race to be Hollywood East, North or South. The studios have played one state against another, creating the typical race to the bottom that is an inevitable by-product of the tax abatement economic growth strategy.
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