Incoming Iowa Governor Wants to Permanently End Film Tax Credits

December 06, 2010

Iowa's Governor-elect Terry Branstad plans to permanently end the state's wasteful and troubled film tax credit program. The credit program was suspended last year when it was discovered that the program was full of corruption and abuse. Government officials stepped down, filmmakers were charged, claims of anti-Semitism surfaced. Branstad, who oversaw the creation of the film office (but not the film incentives) while he was governor in the 90s, had this to say about the program:

We did create the film office back when I was governor before and we had success, significant success without the tax incentives. [...] We had 'Field of Dreams', 'Bridges of Madison County', 'Miles from Home' and many other successful films, so I don't think we should rule out the possibility of film-making in Iowa, but I think we need to make sure that whatever we do is cost-effective and the taxpayers' interests are always protected.

We are evaluating what to do with [the Iowa film office] and whether that should be in a different agency or where it should be, but no final decision has been made with regard to the film office. [...] We certainly do not intend to get back into the tax credit situation there. I think that was a bad idea, badly run and we're not going to go that direction.

Branstad has the right idea. Film credits are a bad deal for taxpayers, even when they aren't being defrauded. Other states are moving in the same direction. The Missouri Tax Credit Review Commission, created by Governor Nixon and charged with the task of reviewing the state's tax credit programs for efficiency and effectiveness, has recommended eliminating that state's film incentives. Their reasoning?

This tax credit serves too narrow of an industry and fails to provide a positive return on investment to the state. There is currently no longterm opportunity for the location of production facilities for films in Missouri.

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