Deprived of Tax Subsidy, M. Night Moves Movie to Canada

August 25, 2009

Pennsylvania used to be a popular location for filmmakers, but the intense state efforts to offer more and more generous tax incentives to the industry has shifted most productions to the highest bidding states. Michigan and Louisiana are essentially writing checks to film productions, and it’s hard for states to beat that deal.

Nor should they in most cases—there are better ways to attract investment and jobs. Economic development people like to talk in terms of job creation and economic activity, but filmmaking is transient. The companies coast into town for the length of the production and then leave. They hire a few extras and set workers, but the big jobs go to whatever state coughs up the largest tax subsidy. There’s no loyalty either: as soon as another state offers a better deal, it’s hasta la vista.

Hence, M. Night Shymalan saying goodbye to Pennsylvania:

With uncertainty about whether Pennsylvania’s film tax credit will be authorized in the state budget – now in Day 56 of limbo – the supernatural thriller (which Shyamalan wrote and is producing) has relocated production to Toronto.[…]

“Last week, at the 11th hour, Devil withdrew its application for credits because of uncertainty with respect to whether film tax credits would be in the state budget,” Jane Saul, director of the Pennsylvania Film Office, said yesterday. “This is an obvious sign that without the film tax credit in place, we lose film business, and in turn, jobs.”

Saul is right but Pennsylvania shouldn’t lose sleep over it. Give that money back to taxpayers and let them invest it as they see fit, rather than letting politicians pick this one bizarre industry to shower with favors and get little payoff.

I debated the Pennsylvania film tax credit earlier this year – see here.

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