CT Voices for Children came out with this report Tuesday criticizing the value of film tax credits enacted by the legislature in 2006.
CT Voices for Children’s Executive Director Shelley Geballe said the report, which details the number of film tax credits handed out to 58 productions, is intended to get legislators to start asking, if the tax credit “pays for itself in sales and income taxes.” She said the danger is the film tax credit is uncapped and “as a result, there is no limit to the revenue loss Connecticut might face through these two credits.”
Speaker James Amann, D-Milford, who became a champion of the film tax credit program and even nicknamed the state, “Hollywood East,” said Tuesday, “I think they’re wrong.” Speaking with a small group of reporters on the second floor of the Legislative Office Building Tuesday, Amann said he has to wonder where the group’s motivation is coming from because “they’re dead wrong.” The numbers used in the CT Voices report came from the Office of Policy and Management and the Commission on Culture and Tourism.
Amann said the tax credits have brought new business to the state and have made the state’s tax credit program a model for other state’s who want a piece of Hollywood action. He said it wasn’t just about getting the crews here to film the movies in the state, it was about getting them to create permanent infrastructure in the state. “Our investment is going to pay off big,” he said.
Geballe pointed out in the report that another relatively-recent Policy Brief from the New England Policy Center at the Federal Reserve Bank of Boston, Hollywood East: Film Tax Credits in New England, finds that “film production stimulates little additional economic activity in other industries. Consequently, film tax credits do not ‘pay for themselves’ by indirectly generating additional corporate income, sales, and property tax revenues.”
Geballe points out that it has not been determine, “through an independent evaluation whether an investment of this scale in the entertainment industry provides the best return on Connecticut’s investment.” She said, no other industry in the state has received this kind of support.
In conclusion Geballe asks, “Might $116 million in tax credits in some other industry or industries (e.g., nanotechnology, biotechnology, “green” technologies) result in more permanent, full-time, and higher quality jobs, and also greater direct, indirect, and induced economic activity?”