Georgia’s film industry is growing at an exponential rate. But, is it growing too fast.
Georgia’s film industry is growing. The state has 40 TV shows and movies currently filming in Georgia all thanks to the film tax credits promoted by Gov. Nathan Deal.
Marvel’s ‘Ant-Man‘ filmed in Georgia, ‘Captain America 3‘ is now filming and according to reports, ‘Guardians of the Galaxy 2‘ will film in Atlanta, Georgia as well.
In fact, in 2013 there were 248 TV shows and movies filming in Georgia. In 2014, Georgia spent $1.7 billion in tax incentives. Then, the state Department of Economic Development asserted that the productions “generated an economic impact of more than $6 billion.”
But, how accurate is that $6 billion dollar number? According to a report by Politifact, Georgia may have exaggerated the impact the film industry has had in the state.
Ultimately, it alls comes down to basic economics. According to Politifact, in order to determine how much of an impact every dollar has on the state, Georgia uses a particular formula:
$ (How Much Money Georgia Invested) x 3.57 = Economic Impact
For at least 30 years, the state economic development department has multiplied direct spending by 3.57 to estimate impact.
In economic terms, that is a multiplier, or how many times each dollar of direct spending cycles through direct spending.
In the film industry’s case, that means the state calculates that every dollar of direct spending has generated total spending of $3.57 in Georgia.
Economist at the Andrew Young School of Public Policy at Georgia State University, Bruce Seaman thinks the multiplier the state is using is to high. He believes the industry multiplier should be 1.83 and that the film industry’s impact is way lower than $6 billion. In fact, he argues that the film industry’s impact is only $3.1 billion.
Seaman argues that for every $1 million a production company pays a big actor or director, how much of that money is actually spent in Georgia and does not go back to Los Angeles?
That is, for every $1 million a production company pays a big star – or $100,000 spent on hotel rooms – how much is captured in Georgia before the money goes back to the celebrity’s L.A. home or the hotel’s out-of-state headquarters?
“I want to know what it means to say, ‘that money was spent in the state,’” Seaman said.
But, Seaman does acknowledge the fact that Georgia has grown and developed a workforce capable of handling several major motion pictures at one time.  “The good news, really, is the tax credits are spurring an indigenous film industry taking shape in Georgia,” Seaman said. “It’s incredibly complicated and you would have to look at all of the details on a project-by-project basis to seriously know what’s going on.”
Ultimately, Politifact argues that the state’s formula fails to capture long term spending and investment in Georgia which could increase or decrease the economic impact the film industry has in the state.
Meanwhile, states like Louisiana and North Carolina are throwing in the towel. When North Carolina changed from a tax credit program to a grant program, crew members started fleeing the state due to the lack of jobs.
Louisiana’s Governor Bobby Jindal announced that they will be ending their tax credit program for a grant program instead. Which will be disastrous for the state. Disney-ABC already stopped production all of their shows from filming in Louisiana.
Since then major TV shows and movies are now filming in Georgia – including Fox’s hit TV series ‘Sleepy Hollow‘. Rumors are even circling that North Carolina’s biggest show, ‘Under the Dome‘ is considering packing up their bags and heading to Georgia.
But, it begs the question – is Georgia’s film industry going too fast? Will Georgia run out of qualified crew members to work on all of the TV shows and movies filming in the state and will Georgia still be able to provide tax incentives for TV shows and movies that spend upwards of $100 million?
To read the full report visit Politifact Georgia.
