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Gee, are we getting fleeced or something?

July 21, 2009

At some point, even the biggest suckers can figure out when they've been had. The Des Moines Register reports that the Iowa Legislature is beginning to catch on that their tax credit subsidy to Hollywood may not be the world's best idea:

"I think it needs to be looked at some more," said Sen. Joe Bolkcom, D-Iowa City, who is chairman of the Senate Ways and Means Committee. "We're probably being more generous than we need to be."
Sen. Randy Feenstra, R-Hull, who voted against expanding the tax break for movie makers, is more blunt.

"We gave the movie industry a tax deduction," he said, "but our businesses, our schoolteachers and our flood victims didn't get anything."

The break is a "transferable" credit, which means the filmmakers can sell them to finance their projects. In other words, it's a straight cash subsidy, only less efficient. The credit covers 50% of Iowa film costs, making it one of the most generous in the nation. But all is not well:

Budget problems are causing some lawmakers to talk about repealing the tax break, estimated by state officials to cost Iowa as much as $50 million this year in uncollected revenue.

But it's unlikely that enough legislators will wise up anytime soon:

House Majority Leader Kevin McCarthy, D-Des Moines, describes himself as a "movie nerd" and has expressed enthusiasm for the Iowa productions.
Senate President Jack Kibbie, D-Emmetsburg, said he believes the credit will prove to be beneficial to the state. Kibbie said he would consider legislation guaranteeing the credit in future years.

Sen. Brad Zaun, R-Urbandale, a member of the Senate Ways and Means Committee, said he would not support a reduction of the movie credit. "I think, considering the productions that have been brought to the state of Iowa, that it's working," he said.

If "working" means "taking money from your struggling business and from your employees to give it to other businesses with good lobbyists," it's working just fine.

Tags: economic development.film credits.harold hill.tax credits.