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State tax receipts continue to crash; moviemakers want more of what's left.

September 02, 2009

The state's revenue stream continues to dry up:

August was another red-letter month - as in negative growth - for net state tax collections.

Last month's 2.8 percent decline in state revenues marked the seventh straight monthly decline. Legislative Services Agency senior tax analyst Jeff Robinson said November 2008 was the last time tax receipts registered a "true" positive when processing factors didn't artificially skew the numbers.

"I would say that this was a bad month," Robinson said of the 2.8 percent August decline that drove year-to-date receipts to a negative 4.1 percent compared with the first two months of fiscal 2009.

So far, current year revenues lag behind a year ago by $41.5 million and the 4.1 percent decline is below the 0.5 percent yearly drop for fiscal 2010 envisioned by the state Revenue Estimating Conference

Never mind that. We need to spend more money on moviemakers!

Filmmakers Call For Expansion To Tax Breaks

A lot of film projects are coming to Iowa to take advantage of generous tax breaks and there are people who say Iowa should do even more. Movie makers want legislators to remove a $50 million cap to help lure more projects to Iowa.

The movie credit is "transferable," which means that filmmakers sell the credits at a discount to fund their projects. It works just like a cash subsidy, except that the discount makes it less efficient. Unless the legislature would be willing to vote direct grants to filmmakers out of the general fund, they shouldn't be willing to grant transferable credits.