Writing in the Los Angeles Times, Michael Kinsley, a top-notch columnist for more than 20 years, provides an outside-Michigan perspective on film tax credits, and he’s probably harsher in his criticism than the outspoken opponents in our state.
In his recent Op-Ed piece, Kinsley thrashed former New Mexico governor Bill Richardson for advising his successor that the state’s film credits must be maintained at all cost.
“In less than a decade, the absurd notion of welfare for movie producers has evolved from the kind of weird thing they do in France to an unshakable American tradition,” Kinsley wrote. “…Richardson says that the film and TV subsidy has brought ‘nearly $4 billion into our economy over eight years’ and has created 10,000 jobs. By ‘our,’ he means New Mexico. He says every state should emulate this success. 
“But of course every state cannot do that because it essentially is a ‘beggar thy neighbor’ strategy. Some of the movies that have been bribed to locate in New Mexico would have been made in New Mexico anyway. That part of the subsidy is a total waste.
“Most of the movies that have come to New Mexico for the subsidy would otherwise have been made in other states. New Mexicans may not care if the citizens of those states lose out, but inevitably those other states respond with subsidies of their own and New Mexico gets beggared along with everybody else.”
It’s at this point in the column where Kinsley wades into the statistical sea, pointing out faulty figures, much like those who are engaged in the ongoing debate in Michigan.
“Richardson’s statistical claims are suspect, to say the least,” Kinsley wrote. “He would not win an Oscar for math. He says that 10,000 jobs and $4 billion ‘are huge numbers for a state with a population of only about 2.1 million.’
“You can say that again. If Richardson’s figures were correct — if every state had a similar program and every program achieved the same alleged success on a per capita basis — that would mean film subsidies would be adding $600 billion to the (U.S.) economy over eight years and would create 1.5 million jobs.
“Given that the entire movie production and distribution industry generates about $55 billion a year, it seems unlikely that this subsidy alone generates $75 billion a year (one-eighth of $600 billion) in new business. Similarly, it’s hard to see how the subsidy could add 1.5 million jobs to an industry that employs, according to the Bureau of Labor Statistics, about 362,000 people.”
Kinsley goes one step further, citing a study that judiciously tagged all the phony numbers in various states’ sales pitches about the film credit.
“In the definitive document on this issue — a paper published in December by the Center on Budget and Policy Priorities — senior fellow Robert Tannenwald notes what he tactfully calls ‘flaws’ in various studies the states have commissioned to justify the subsidy,” Kinsley wrote.
“Even after our recent experience with gullible or mendacious accountants in financial scandals like Enron’s, it’s actually shocking that reputable accounting firms would pull some of these stunts, such as counting the allowances film crews get paid for expenses as a benefit to the state, then counting the same money again when it is spent. Or assuming without explanation that the average film crew member makes $82,400 a year, when the Bureau of Labor Statistics sets that figure at $35,000.
“The most outrageous double counting, of course, is telling one state after another that it can bring in billions by enticing the same movies away from other states.”

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