The Lure of Hollywood

Drawn like moths to the flame, many politicians can’t resist the Klieg lights of Hollywood.  As we continue to unpack what was passed during the 2013 Minnesota legislative session, the latest surprise discovery is $10 million in state subsidies for film production.  Like professional sports stadia, movie production is one of those glamour industries that we love to throw money at, while suppressing actual wealth-creating industries like copper mining and sand mining.

At least the state’s bureaucrats are not under the delusion that $10 million is enough to lure major motion pictures with A-list actors.  The Minneapolis Star Tribune quotes state film board executive director Lucinda Winter,

While it’s not enough to draw such blockbusters as an Iron Man or Hunger Games sequel, she said. “it puts us back in the game to land small to midsize movies like Magic Mike or Silver Linings Playbook.”

However $10 million will be plenty to attract Hollywood slicksters who see us Midwestern rubes as easy marks.  And it turns out, they’re right.

Unmentioned in the Star Tribune story is the experience of our neighbor to the south, Iowa.  In 2009, Iowa was forced to shut down its film subsidy program because of scandal and fraud that resulted in criminal charges.  In 2010, the Los Angeles Times reported,

But former Gov. Chet Culver suspended the film program in 2009 after an internal audit found irregularities, including filmmakers using tax credit funds to purchase a Land Rover and other luxury vehicles for themselves.

The criminal charges followed a special audit the state conducted in October of 22 films that were awarded tax credits before the program was suspended.  The audit found that $26 million of nearly $32 million in tax credits were awarded improperly, either because the productions did not qualify for the credits or producers did not submit required documentation.

That same LA Times article details similar scandals in Louisiana and Wisconsin.  Even without the outright fraud, studies have shown that state subsidies for film production are not a good investment of taxpayer money.  We seem determined not to learn from the mistakes of others.