Starstruck

You might want to read Steve Malanga’s article at City Journal on the subsidies being doled out by state and local governments to have movies and TV shows filmed in their jurisdictions:

The rise of celluloid subsidies resulted from a sharp increase in the 1990s of so-called runaway productions—movies and TV shows filmed in foreign countries for cost savings. The number of U.S.-conceived and -developed movies and TV series shooting abroad rose to 285 in 1998, up from 100 in 1990, according to a study by the consulting firm Monitor Company. More than eight in ten of those productions were in Canada, where a roughly 20 percent decline in the Canadian dollar, plus tax rebates that the government offered to American producers, slashed the cost of filming by about one-fifth compared with a similar production in the United States. After the Monitor report, states took action. A few had launched modest incentive programs in the 1990s, but Louisiana changed the game in 2002 when it vastly expanded its effort, offering producers an exemption on sales taxes and an investment-tax rebate. Hollywood started shifting productions to the Bayou State, leading others to follow Louisiana’s lead.

For some states, it wasn’t only a matter of economic opportunity but also of pride. After Chicago filmed in Toronto, for instance, Illinois lawmakers started granting producers a 25 percent tax credit on wages paid to Illinois residents for movies filmed there. No sooner did that program go into effect in 2004 than high-profile productions, including Batman Begins and Ocean’s Twelve, arrived in the Land of Lincoln. In a tax-incentive version of the line “I’ll have what she’s having” from When Harry Met Sally, the number of states offering inducements grew from six in 2002 to 44 by 2010. States were giving away about $1.5 billion to Hollywood annually by then, up from less than $100 million in 2002.

There’s a lot of money involved and the return on these pricey investments is generally lousy. I can’t help but wonder if state and local officials aren’t just starstruck and are feeding their desire to hobnob with the beautiful people.