1.OCTOBER 13: CONCLUDING TRANSCEND SERIES SESSION
On Wednesday, October 13, Sutherland Institute will team with The Heritage Foundation to host the third session of its award-winning Transcend Series:
Do Principles Matter Anymore?
Understanding and Implementing Principle-Based Governance
Sutherland President Paul Mero will join with The Heritage Foundation’s Matthew Spalding and Michael Franc to facilitate a discussion on the topic. Mr. Mero will begin by addressing thecontext of principle-based governance within a conservative intellectual framework. Mr. Spalding will address its meaning and constitutional basis. Mr. Franc will explain how such governance looks in practice.
Mr. Spalding connects the principles of America’s founding with today’s thorniest issues as director of the B. Kenneth Simon Center for American Studies at The Heritage Foundation. Mr. Franc, vice-president of legislative affairs, leads a Heritage team that helps members of Congress understand and defend conservative principles in exercising their constitutional powers to approve budgets, make laws and oversee government operations.
Following check-in and seating at 8:30 a.m., the session will begin at 9:00 a.m. and conclude at 3:00 p.m. The venue will be the Sutherland Institute Conference Room, located in the Crane Building, 307 West 200 South, Suite 5005, in downtown Salt Lake City.
There is no charge for this event and limited free parking is available in the Crane Building’s south parking lot, along the adjacent streets. Pay parking is located in the lot immediately south of the building ($5 for the day). Light snacks will be provided. There will be a lunch break on your own at one of the many nearby restaurants.
Because seating is reserved, please register by sending an email to email@example.com or calling our office at 801-355-1272.
2.THE SILVER SCREEN: UTAH’S SUBSIDIES TO HOLLYWOOD
By Allan Carlson
Film executives “would shoot a movie on Mars if they could get a 25 percent tax break,” a movie director has reported. In fact, the state of Utah recently gave a hefty tax break to the Walt Disney/Pixar studios to film “John Carter of Mars” right here in the Beehive State. While bearing all the glitter of Hollywood, this episode is actually one of the more blatant examples of the crony capitalism that has of late infected Utah and other states, all under the label of economic development. Exposing the problems of this new form of state economic planning, and proposing alternatives, is a major purpose of Sutherland’s Center for Community and Economy.
According to Governor Gary Herbert’s Office of Economic Development, a $5.5 million “post-performance incentive package” from the taxpayers lured the filmmakers down to the rugged landscape around Hanksville, where they worked for 45 days in late spring, reportedly creating 300 jobs and generating $21 million for the Utah economy. Using the same Motion Picture Incentive Fund, the office also claims to have drawn 21 other film projects (including commercials) to the state during the 2010 fiscal year, involving 557 production days and an economic impact of $137 million. It all sounds fairly impressive, until one peers behind the wizard’s curtain.
Motion picture incentive (MPI) programs are a relatively recent phenomenon at the state level. The rush to use public money to lure movie producers out of California actually began among foreign countries, with Canada and Bulgaria in the lead. The American states, according to The New York Times, have now become the “New Bulgarias.” Minnesota was the first state to roll out an incentive package, in 1998. By 2002, five states had them; and 44 states in 2010.
To be fair, Utah’s program is relatively modest when compared with some of the others. For example, Louisiana shelled out $27 million for the privilege of having Brad Pitt’s “The Curious Case of Benjamin Button” filmed in the state. Michigan covers up to 42 percent of a film’s total production costs, with annual expense for the program soaring to near $160 million. Many of these include the cozy incentive of a refundable, transferable tax credit: If the tax break provided exceeds the filmmakers’ tax liability to the state in question, they can sell the remainder on the open market. All the same, Utah Film Commissioner Director Marshall Moore wants the Legislature to scrap the existing cap on Utah’s incentives “in order to compete for larger-budget motion pictures.”
Some advocates make the claim that MPIs pay for themselves through increased state sales and income tax revenues. This is surely untrue. Rhode Island’s Department of Revenue found that for every state dollar transferred to the film companies, it gained back only 7 cents in revenue. For Connecticut (with a 30 percent refundable credit), the return was only 8 cents; in New Mexico, 14 cents. One need not be Warren Buffett to see the problem here.
Advocates reply that the MPIs also create jobs. In 2008, for instance, Michigan’s incentives reportedly created 2,800 film production jobs. However, most of these were of short duration, the average being 23 days of employment. This amounts to a full-time equivalent of only 254 yearlong jobs. Using a generous “multiplier,” which calculates the broader economic impact of an activity on secondary suppliers such as hotels and restaurants, Michigan officials could claim a net gain of 1,102 full-time jobs. At a cost of $48 million, this amounted to $43,557 in state subsidy per “new” job, a staggering sum. As one economist has summarized: “Film incentives are not designed to create jobs but to create job announcements.”
Another problem with MPIs is that taxpayer dollars are given to film producers unnecessarily; that is, in many cases they would film in the state even without the bribe. Granted, this would not always be true. If you want to make a movie in a small Midwestern town, for example, one in Iowa is probably just as good as one in Indiana, and a bigger incentive – even if economically foolish from the perspective of the taxpayers – might tip the balance. Yet in many other cases, location is the driving force. One suspects that that was true for “John Carter of Mars.” The landscape around Hanksville – red, dry, barren and rock-strewn – has been repeatedly judged by scientists and science fiction enthusiasts alike as the one spot on Earth that most resembles Mars. A movie designed to be set on Mars almost had to be filmed there. And in the context of a film with a budget reportedly more than $250 million, Utah’s $5.5 million “investment” seems like a pretty small “lure.” It might be seen simply as taxpayer money wasted.
More broadly, Utah has many built-in advantages for filmmakers: a remarkably varied, unique and beautiful landscape, from snow-capped peaks to the Canyonlands to great deserts; a talented and well-educated citizenry; a home-grown film industry complete with film crews and equipment; an international airport with global connections; and a short flight time to Los Angeles.
The allure of the “big film” is also mostly a mirage. Such productions come and go quickly, leaving a negligible legacy. A real film industry relying on local talent comes from small productions, such as low-budget films for television, independent movies, documentaries and commercials.
Can the state of Utah do nothing then to encourage the film industry? Actually, there are several important steps that it can take. First, a refocused Utah Film Board should give film producers active assistance in complying with (or overcoming) state and local regulatory and zoning problems. Second, state government should focus on improving infrastructure and encouraging an education system that rewards student creativity and innovation.
And third, the state of Utah should create a regulatory and tax system that offers a welcome mat to all businesses and entrepreneurs, not just those favored by the current crop of politicians. Cut corporate taxes, streamline regulations, and put an end to all forms of crony capitalism: The film moguls will beat a path to Utah’s great door.
The author, Dr. Allan C. Carlson, is director of Sutherland Institute’s Center for Community and Economy, president of The Howard Center for Family, Religion & Society, and an associate professor at Hillsdale College in Michigan. Dr. Carlson founded the World Congress of Families in 1997. He has written for numerous publications including The Wall Street Journal, National Review, and Intercollegiate Review, and is the editor of The Family in America. He is the author of nine books, in cluding The Natural Family: A Manifesto (Spence, 2007), which he co-authored with Paul T. Mero.