House Bill 1037 would require an audit for every production that receives the credit. The Senate version would have the Department of Revenue, rather than film companies, hire the auditors, Hufstetler said.
HB 1037 also would expand the tax break to more productions, but Hufstetler wouldn’t go along with that, particularly at a time when state lawmakers face the prospect of having to cut $2.6 billion in spending in the upcoming fiscal year because of the coronavirus pandemic recession.
Georgia has awarded about $4 billion in tax credits over the life of the film tax credit program, including $870 million last year. More than 450 movies, TV shows and other productions were eligible for tax credits in 2016 alone.
Supporters say the credit has helped make Georgia the Hollywood of the South. They said the tax credit has generated a 7-to-1 return on investment.
But a state audit earlier this year found the economic impact of the tax credit has been greatly exaggerated. J.C. Bradbury, an economist at Kennesaw State University who has studied the credits, said they're a money-loser for Georgia taxpayers -- generating about 30 cents on the dollar.
The state audit also found companies received millions of dollars' worth of credits they didn't earn.
Among other things, the audit found credits granted for ineligible expenditures, such as work done outside Georgia. And it found weak oversight that made the program "ideal for fraud."
Groups trying to come up with ways to mitigate some of the state spending cuts have called for limits on how much the government doles out to film companies.
Sen. Bill Heath, R-Bremen, a member of the Senate Finance Committee, raised that idea Monday.
“Do we need to be getting some caps in this?” Heath said as Hufstetler presented the bill. “There are no times more treacherous, dangerous, than right now.”