We frequently remind readers that budgets are all about our values and priorities, and the choices we make about how to use our collective resources as Californians. In light of growing concern over the national and state economies and their impact on revenues and projected long-term budget shortfalls, readers might find the Legislature’s rush to extend the film tax credit created by the 2009 “dark of night” budget deal a bit surprising. As Sacramento Bee columnist Dan Walters noted this morning, AB 1069 (Fuentes) which would extend the film tax credit from July 1, 2014, until July 1, 2019, is sailing through the Legislature.
While the higher fees community college students will pay this fall won’t directly pay the $104 million cost of this year’s film subsidies, which averaged $3.6 million for each of the 29 projects granted credits, the fee increase will cost students an amount almost equal to the 2011-12 price tag of the credit. That’s why we say budgets are about values and choices. The credit’s cost is also just about equal to the savings from reducing the time limit on CalWORKs’ cash assistance – 80 percent of which goes to children – from five to four years or enough to provide an additional $16.76 for each of the students in our public schools.
Recent research points to the high cost and limited effectiveness of film tax credits. That’s why Arizona, Arkansas, Idaho, Iowa, Kansas, Maine, Michigan, New Jersey, New Mexico, Washington State, and Wisconsin have all scaled back or eliminated subsidy programs. Lawmakers should avoid a rush to judgment and, at a minimum, should require a meaningful and independent review of the existing subsidy program before obligating the state to spend $100 million per year for an additional five years on an unproven program. With tight budgets expected as far as the eye can see, a dollar spent on a film tax credit means a dollar less for the programs and structures that Californians depend on.
— Jean Ross