Hollywood handouts shouldn’t come before environmental cleanup 

Representatives from both parties are drafting a federal tax incentive for the movie industry — a move likely to give taxpayers a poor return on their money. New evidence highlights the type of spending that benefits communities one can overlook when jetting from Los Angeles to Gotham.

State and local governments have a history of throwing cash at firms to entice them to their jurisdiction. My review of credible studies regarding relocation incentives found that, on average, 93 percent of relocating firms would have come anyway. Incentives for Hollywood fit the pattern. An audit of Georgia’s Film Tax Credit found that for each dollar the state gave, 19 cents came back. Although tax revenue is just one metric, it shows the unfavorable deal taxpayers gave for Hollywood to come down to Georgia.

Governments at all levels should exit the business of ad-hoc corporate tax incentives and focus on what they are uniquely positioned to do: fund broadly enjoyed goods that others won’t. A prime example is funding the cleanup of environmental hazards that plague many communities and the restoration of the amenities they once enjoyed. A corporation can pocket a tax incentive and move on; no one can pocket a river made healthy for fish and people or a site suitable for new homes.

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