A Georgia State University study released last week provides an aggressive defense of the state’s film tax credit that has fueled a massive boom in TV shows and movies and corresponding studios.
The 88-page paper called “Building Georgia’s Digital Entertainment Future,” was financed by two local industry groups: the Georgia Screen Entertainment Coalition, which represents the local studios, and The Georgia Production Partnership, a broad-based entertainment lobbying group.
“We have to remain competitive with the incentive,” said Brennen Dicker, a film and video professional and executive director of the Creative Media Industries Institute at GSU who oversaw the study. “We’ve seen this phenomenal growth in the creative sector in the state.”
From 2009 to 2019, the study estimates that Georgia saw 210% growth in what it defined as “the creative sector,” quicker than any other state in the nation, gleaning data from multiple sources. (The tax credit was enacted in 2008.)
Dicker said the study was started in 2019 focused exclusively on the impact of the film and TV credit. Once the pandemic began, they placed the study on hold, then decided to make it a more comprehensive look at the entertainment industry including gaming and music. Besides essays on each segment, the study features mini-profiles of various businesses including Trilith Studios, studio management and production services support company MBS Group, gaming company AXR Edge and Moonshine Postproduction.
Credit: TRILITH STUDIOS
Credit: TRILITH STUDIOS
What impressed Dicker most is how the incentives fueled infrastructure growth in the state that has only quickened in recent years. This year alone, he noted, five new TV and film studios have opened or are scheduled to open including Athena Studios in Athens, Electric Owl Studios in Atlanta, Assembly Studios in Doraville, BlueStar Studios in the former Fort Gillem space in Forest Park and a Lionsgate studio in Douglasville.
Georgia now has more purpose-built studio space than New York and is only exceeded by California.
The investors in these studios receive no money from the tax credit system. They have all gambled on the tax credit system continuing with comparable generosity moving forward.
The study came out just days before a joint House-Senate panel studying tax breaks met to ponder the future of the incentives.
One of the key drivers for the success of the 30% tax credit is the fact it is uncapped, a benefit not available in any other state. This means for the past couple of fiscal years, producers generated more than $1 billion in qualified tax credits, drawing big-budget films into the state that might have otherwise gone to England or Canada, which offer comparable uncapped tax incentives.
Credit: TNS
Credit: TNS
The study said if the legislature opts to cap the credit, it may result in a “major exodus” in big productions because “investors end up lacking the confidence they need to commit to Georgia projects, and even if the cap does not enact huge cuts, project work may flee the state because investors lack confidence in their ability to access the incentive mechanism.”
It suggested smaller tweaks such as raising the minimum spend threshold to qualify for the credit, which is currently $500,000, or providing incentives for productions originating in Georgia or using more rural parts of Georgia. The study said it could also offer more incentives for episodic TV series because those tend to offer more stable work for cast and crew than one-off films.
J.C. Bradbury, a Kennesaw State University professor and long-time skeptic of these types of tax credits, was not impressed by the study, calling it “nothing more than industry-funded propaganda, which raises the questions as to why a state university allows its name to be put on such a product.”
He said the findings fail to “align with any sober understanding of the policy implications regarding state film subsidies. In my quick glance over it, I see nothing credible in it. The institute appears to have no expertise in economics or policy analysis. Asking people without policy/economics training to conduct public policy analysis regarding economic benefits is like asking me to write a Hollywood movie script.”
Randy Davidson, who runs Georgia Entertainment News and actively promotes the state’s film and TV business, felt like the paper was an interpretation of existing data that would help a more neutral observer better understand why “the creative economy is important and why the state should invest in this type of growth.”
You can read the study at digitalentertainmentreport.gsu.edu.
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