Film Industry Had a $7 Billion Economic impact in FY 16

The audience quieted down as the movie industry awards ceremony continued at the Dolby Theater in Hollywood.

… And in the category of “Greatest Economic Impact,” the winner is …. Georgia!

Governor Nathan Deal announced today that Georgia’s film industry had a $7 billion impact on Georgia’s economy in Fiscal Year 2016, an increase of $1 billion from FY 2015. Direct spending on the 245 movies and television shows filmed in the Peach State generated $2.02 billion in direct spending during the year.

The growth of the film industry has been a major focus of the state’s Department of Economic Development under the administration of Nathan Deal. In a statement, Department of Economic Development Commissioner Chris Carr touted the success of the film industry.

Georgia’s film industry is on a steady rise year over year and now ranks number three in TV and movie productions, just behind California and New York. As long as we continue to deepen our crew base and add even more studios and businesses to support the industry, Georgia is ensuring its place in the film industry well into the future.

In 2014, the state’s High Demand Career Initiative identified the film industry as a key target area for economic development and job growth. That led to the creation of the Georgia Film Academy, a joint effort between the University System of Georgia and the Technical College System of Georgia to teach students the skills they needed to enter the field.

The expanding film industry brought more than 130 new, relocated, or expanded businesses to Georgia, including Atlanta Metro Studios in Union City and a significant expansion at Pinewood Atlanta Studios in Fayetteville.

Governor Nathan Deal also noted the industry’s impact.

Georgia’s film industry provides a significant impact on our state’s economy, employing thousands of Georgians while developing infrastructure and boosting small businesses. The film industry has created a home in Georgia, and I am committed to retaining this relationship by constructing a strong, film-ready workforce that will continue to help the industry thrive.

This fall, will see the debut of several productions filmed in the Peach State, including the movies Solace, starring Colin Farrell and Anthony Hopkins; Sully, starring Tom Hanks, Anna Gunn and Laura Linney; and The Birth of a Nation, starring Nate Parker and Armie Hammer. On TV, look forward to Atlanta, on FX; The Walking Dead, on AMC; and Halt and Catch Fire, on AMC.

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gcp
gcp

Prior to 2006 the only major film projects done in Georgia were a whole bunch of Burt Reynolds movies and one major tv series ( Heat of the Night). Tax credits/deductions/breaks changed everything. The industry here is still young both chronologically and in terms of average age of workers.

While the state talks about a seven billion dollar impact the overall benefit to taxpayers is unclear. One of the best objective studies was done by Ga. State University in February 2016. Their conclusion (page 12) is that the “relative costs and benefits of Georgia’s film tax credit are uncertain.”

http://frc.gsu.edu/files/2016/02/Georgia-Film-Tax-Credit-February-2016.pdf?wpdmdl=4594

Saltycracker
Saltycracker

$7 billion in impact for GA – that should result in some revenue and benefits, more than enough for the state to match just the tax credits with same dollar increase in the roads and bridges budget. Fair ?

atler
atler

But at what cost? Did Georgia values – OTP Georgia values anyway – have to be sacrificed in order to import Hollywood culture down here in exchange for a few dollars? Seeing Nathan Deal flip-flop on a career’s worth of positions on social and economic issues – and the rest of the Georgia GOP follow meekly behind his governing to the left of Zell Miller and Joe Frank Harris – makes me think that the answer is “yes”. It would be much better for Georgia to take all the money that it is forfeiting with tax credits and incentives to… Read more »

Benevolus
Benevolus

OK, I’ll bite. What are these “Georgia values” of which you speak?

atler
atler

I shall bite back in turn. Do you agree that Madison Alley is culturally distinct from Silicon Valley? http://www.businessinsider.com/apples-eddy-cue-blew-tv-deals-2016-7 “Cue apparently showed up late to negotiations with Time Warner CEO Jeff Bewkes, wearing jeans, no socks, and a Hawaiian shirt. One Time Warner executive “kept looking at the Apple guys like: ‘Do you have any idea how this industry works?’” So just as northeastern establishment Wall Street is culturally distinct from the more informal and freely expressed west coast, do you deny that Georgia is different as well? With that in mind, should Georgia aspire to be more like Wall… Read more »

Ellynn
Ellynn

My office has 23 people in it. 4 were raised in Georgia, another 3 in the south, 1 from South America, and 1 from Greenland. The rest of us came from the Midwest . The 17 of us non southerners are all legal Georgia residence, our averaging 24 years. 80% of us own homes. Pay taxes just like you. Vote and go to church and everything. I have a job here because way back when, Georgia voters approved the collection of funds through splost and Hope plus other grants/credits to create items communities needed (and in some case just wanted).… Read more »

The Eiger
The Eiger

This is why my party can’t have nice things. I’m sorry.

Ellynn
Ellynn

A party that originated in (wait for it) Wisconsin.

atler
atler

Ellyn, despite your adversarial response you and your colleagues perfectly illustrate my “Or should we retain what it is about this state that made it a pretty good place to live for the vast majority of its citizens for quite awhile? So much so that we were one of the national leaders in importing other folks from someplace else for decades?” point. It is exceedingly curious that you very strongly believe otherwise, but folks believe what they decide to I suppose.

Benevolus
Benevolus

Still not clear- is it friendliness we want to protect? Or warm weather? Non-union labor? What is it that is in danger of being diluted by Yankees?

Ellynn
Ellynn

Is not answering a direct question a Georgia Value?

Oh wait, I forgot, I’m not really “worthy” in your world view. My mistake. I’ll just sit back and keep my Midwestern thoughts to myself. Carry on with your rant to progress. I’ll just quietly follow along from now on as you dig your hole deeper.

davidmac
davidmac

Bless your (midwestern) heart, Ellynn.

-Ohioan

atler
atler

No. Your party cannot have nice things because it claimed that Iraq was an “imminent threat” and attacked it 18 months later, which tends to be at odds with the term “imminent”, and then failed to send in the amount of troops needed to properly secure the country from inevitable counterinsurgencies and ethnic strife, leading to a quagmire that cost trillions of dollars – a lot of it given in no bid contracts to companies owned by Bush and Cheney contributors for work that was shoddily done or never done at all – and hundreds of thousands of lives. Your… Read more »

The Eiger
The Eiger

You are free to cross the border to Alabama anytime. I’m pretty sure they hold similar values to your Georgia values. Meaning “Yankees ain’t welcome.”

Benevolus
Benevolus

As if Toronto, Paris, Berlin, et. al. don’t invite ‘foreign’ businesses in?

There are ways to protect cultural heritage without shutting out businesses and jobs. But it’s going to be hard to discuss without knowing what the heritage is we are trying to protect. Low wages? Southern accent?

France tries to protect the integrity of it’s language, for example, and there are several dialects that are officially recognized.

But just because somebody serves clam chowdah doesn’t mean we have to give up BBQ.

atler
atler

As a progressive, you should be the most opposed to using tax credits and subsidies to lure bribe employers into relocating jobs here. Sometimes, the tax credit and subsidy amount exceeds the average salaries of the jobs “created!” Another thing that is often not mentioned: the companies that relocate here do so in order to evade even the most minor unionization and pro-worker laws, and in particular because they can get away with paying workers 25% to 50% less than the same work in their home states and elsewhere. So it raids the treasury of funds that should go to… Read more »

Benevolus
Benevolus

As a progressive, I find there are more compelling issues at the moment than opposing jobs that are going to go somewhere might as well be here. Like voting rights, racism, health care, gun control… We don’t have complete numbers but I am on the side of those who think the movie production here is a net positive. But then again, I don’t think GMO crops are necessarily a bad thing, so I suppose I’m not ‘pure’. In any case, the hyperbole doesn’t do anything to advance the argument. “Sometimes, the tax credit and subsidy amount exceeds the average salaries… Read more »

Ellynn
Ellynn

I guess we shouldn’t tell atler that one of the vocational tracks already taught in the tech system is film. We shouldn’t mention that some of the programs have corporate non Georgia sponsorships that donate the equipment they train on so Georgia tax payers don’t have to pick up the tab. Depending on what campus, Georgia born OTP child can learn lighting, blocking, , the construction departments have class on set creation and the cosmetology departments have classes in hair and make up for film. Oh and the culinary departments have added some crew set up directives in their large… Read more »

Charlie
Charlie

Or that the average income for folks in these jobs is $84K. Something one of these Georgians can be making fully trained at the age of 20.

Ellynn
Ellynn

We most likely shouldn’t mention to atler the article Jon posted this morning on the Georgia Consortium for Advanced Technical Training or that most of the local companies involved in the high school vocational program (and helping to pick up the tab) are global corporations NOT based in Georgia. We shouldn’t mention the German certification either. As a off topic side note Charlie, did you know most Midwesterners are mainly of German/Polish heritage (AKA Prussian at that time), and when they came to the United State in the 1870- 1900, and became the workforce of the US industrial revolution? They… Read more »

Charlie
Charlie

Well….did you know that it wasn’t over when the Germans bombed Pearl Harbor?

Ellynn
Ellynn

Piff.

The Eiger
The Eiger

Do you deny that the credits have worked?

atler
atler

utility != propriety

The Eiger
The Eiger

So…… Is that similar to Georgia values?

Ellynn
Ellynn

Major movies I can name off the top of my head filmed in the Savannah metro area prior to 2006 Midnight in the Garden of Good And Evil, The Legend of Bagger Vance, The Prince of Tide, Glory, Forrest Gump, The Generals Daughter, The Gift, Forces of Nature, G.I. Jane, The Gingerbread Man, 1969, Something to Talk About, Now and Then, The Rose and the Jackal, and lets not forget the original Cape Fear. (We will over look the whole Swamp Thing series.) Some of these were shot the last time the state had a film tax credit. Some of… Read more »

gcp
gcp

Bagger, Prince and Gump were as much filmed in South Carolina (if not more) than Georgia. Midnight was mostly Ga. along with some Los Angeles filming. Not sure on the others.

Ellynn
Ellynn

I’ll give you Prince of Tides. The crew was stationed in Bluffton and most of it was on the SC side of the river. The base of operations for Bagger and Gump was Savannah. The crews and actors lived here. My point is we do more then just film inside the perimeter in this state and we have been doing so for awhile. Not just movies, but television (both scripted and reality), commercials, print ads, animation and gaming. I was walking to work last month and I got stopped for about 20 seconds for a fashion shoot. I’m seen drug… Read more »

gcp
gcp

In the 70s and 80s Burt Reynolds was about the only one in Georgia. Deliverance was all N Ga. Mtns., Smokey and Cannonball were mostly Atl, Longest Yard was Reidsville, Sharkey’s was Atl and Lake Lanier. Later in the 80s/90s Heat filmed in Covington. Most of the films you reference were SC/Ga. coastal projects in the 1990s. The big difference today is the huge number of projects and that many are filmed entirely in Georgia. Unfortunately a lot of post production work is still done outside Georgia. Do all these tax breaks benefit taxpayers in the long run? I am… Read more »

Lea Thrace
Lea Thrace

Apropos of nothing at all, chiming in to say Now and Then was filmed in my old neighborhood while we were still living there. It was so cool being a middle schooler walking home and there was Demi Moore just across the street.

Ellynn
Ellynn

I was running late to class as a SCAD student and I knock over the drink on the table Mathew Broderick was eating breakfast at in The Express Café while they shot Glory. One of the top 5 most embarrassing moments of my life.

augusta52
augusta52

I concur with Benevlous—what are the “Georgia values” of which you speak? And are “OTP” values the same everywhere? Somehow I would think OTP values would differ when comparing, say, Sandy Springs in metro Atlanta and Seminole County in far southwest Georgia…or values at the ritzy Reynolds Plantation along Lake Oconee between Atlanta and Augusta differ from neighboring Hancock County….or values in Augusta’s Columbia County differ from adjoining Richmond County. 80 years ago “Georgia values” may have meant bad ol Gene Talmadge, harsh segregation laws, oppressive Sunday Blue Laws, and lack of religious diversity..not values I would want to go… Read more »

Jared
Jared

If tax credits for this one industry produce such a great economic impact, shouldn’t we equally extend this tax credit to all industries in Georgia to reap an exponentially greater economic impact?

The Eiger
The Eiger

Sure. Within reason. If the tax credits can bring in more revenue than just paying for themselves it should be discussed.

Charlie
Charlie

No. Because all industries are not equal. Do you want the same incentives for coal ash reservoirs? I don’t think you do, even though they create jobs but have negative environmental impacts. How about airlines? Well, we pretty much have the worlds busiest airport and one of the largest employment bases in the world already. What would be the gain for extending this same type of credit to the airline industry? Virtually none, for a huge credit. How about incentivizing the fast food industry? I guess that depends on how many minimum wage jobs you think we need to stimulate.… Read more »

Charlie
Charlie

And on cue, this just popped up in my twitter feed, demonstrating how Florida jobs (and training programs) have moved to Georgia since they capped (and practically eliminated) their tax credit program:

http://www.news-journalonline.com/news/20160730/florida-exodus-incentives-evaporate-school-trains-for-ga-film-industry-needs

gcp
gcp

The benefits look great on the surface but check this quote from AJC:

Wesley Tharpe, a researcher at the Georgia Budget and Policy Institute, said film campuses and crew members relocating to Georgia are anecdotal signs that the credits are working. But Tharpe said the state hasn’t analyzed credits to see if Georgia is actually recouping its investment in new income, sales and property taxes.

“Georgia should be able to answer that question, but we can’t currently,” Tharpe said.

gcp
gcp

Film companies have little income in Georgia. The 20% credit applies mostly to expenditures such as lodging, space rental, payroll. The other 10% applies if they use the Georgia logo. Additionally, they get a sales tax exemption on some purchases. The benefit to Georgia comes from the income tax and sales taxes paid by Georgia based employees. Additionally the presence of the film industry in this state has resulted in new businesses such as Pinewood and ScreenGems which also pay taxes. The question which no one can definitively answer is do the income and sales tax paid by Ga. based… Read more »

Dave Bearse
Dave Bearse

$100M is much too low. It averaged nearly $200M in the 2009-2014 according to GSU (http://frc.gsu.edu/files/2016/02/Georgia-Film-Tax-Credit-February-2016.pdf), and I’d figure it now closer to $300M than $200M. It’s a tax credit, not a tax deduction. The industry mainly pays income and sales taxes of 6% and 7%, note the tax credit divided by the tax credit rate. Assuming a 30% credit, and assuming crudely quarter of it being recovered (6% income or 7% sales, plus other incidental taxes) from the tax credit itself, requires other direct spending and indirect economic activity be nearly three time that directly recovered, or nearly 4… Read more »

gcp
gcp
NoParty4Me
NoParty4Me

I find it a bit odd that certain political parties push “less taxes, less regulation,” which IMHO screw the average citizen, and yet we there is whining when a tax incentive brings economic benefit to regular GA citizens, local businesses and provides income back to the state. Politicos can’t preach low/no taxes and then get up in arms about reducing tax income.

NoParty4Me
NoParty4Me

Thanks Charlie. I can’t repeat this enough. The TV/Film industry spends a lot of money with thousands of local businesses, services and labor. The tax incentive only applies to money spent in state on qualified expenditures, purchases and rentals. Those resident businesses and labor still pay income taxes and sales taxes and spend their additional income mostly in Georgia. Full disclosure, I do work in the TV/Film industry and can say I have spent more money locally with these good paying jobs. Even out of town TV/Film labor spends lots of money while in residence in GA. Yes, we are… Read more »

Benevolus
Benevolus

I should also disclose that my company has some customers in the industry. It’s a tiny part of the business revenue.

My biggest concern had been that these production companies often pop up, make a movie, then dissolve, like a car passing in the rain in a film noir. But they have always been happy to pay in cash (usually) or credit card.

It’s off-topic, but the thing that strikes me about these customers is that they have always been enthusiastic about what they were doing. No cynicism. Not sure why that is but it sure is refreshing.

Dave Bearse
Dave Bearse

Transience breeds employment insecurity that helps maintain labor subservience.

NoParty4Me
NoParty4Me

Each production company is its own business entity, which means setting up a new account for every production, even if the big money funding is from a major studio that has done prior business with you. There are many producers, production managers, and department heads that return to ATL, or even move here, after doing their first production. This helps good local vendors get repeat business with new shows because people keep doing business with reliable locals.

Dave Bearse
Dave Bearse

(Reposted above because it was intended to be a response to Jon’s comment.)

Saltycracker
Saltycracker

Perception is everything in the fantasy land of fuzzy math. I love and hate Walt Disney. He built a magical place with corporate sponsors, government gifts, stockholders (I really loved him) and favorable regulations including his own city. He destroyed my favorite woods and swamps and preserved a corner. He brought great joy to millions, employeed thousands and filled our neighborhoods and prisons. He changed us forever in central Florida as did President Carter with Castro’s criminals. We can’t always sort out what is good and evil but we must participate in the consequences of change. As some learned on… Read more »

augusta52
augusta52

The late David Brinkley, long term newscaster at ABC and NBC for decades, in his autobiography recalled an interview in the early 1940s with perhaps Georgia’s ultimate demagogue, Gene Talmadge, then in his third term of office (back in the days when Georgia governors served two-year terms): He (Talmadge) said, “Are your foreign-born?” (Brinkley responded), “No sir, I was born in North Carolina.” (Talmadge then responded), “That’s foreign-born. Outside of Georgia.” Brinkley then asked Talmadge why he boasted of not winning the city vote in those days (when we had the old county unit system that favored rural areas). “Big… Read more »

drjay
drjay

i know i’ve told most of these stories before but they seem worth repeating here. i live near sav’h and work in sav’h. i have friends based here that now work full time in the film industry mostly here in town (yes they do travel sometimes- a couple weeks in wilmington or a few days in atlanta etc) they are from california and have relocated here…their is “cinema tourism” now in addition to the regulat tourists savannah already had (people adding sav’h to their itinerary specifically to see the beach from “last song” or the bench from “forrest gump”) i… Read more »

drjay
drjay

the last project i was involved with was “baywatch” this past spring, a big budget multi week event. i would imagine they would not have filmed here at all without the credits, so any money made by anyone involved in the film is a net plus…anything above zero (the amt. of money you’d get from it not being filmed in sav’h) is more than zero…

gcp
gcp

Correct, you pay Ga. taxes on your movie check and you pay Ga. sales tax because you live and work in Georgia. Payroll is one of the “qualified expenditures” so the movie company gets a partial credit on your salary in addition to credits on many of their other expenditures and often a sales tax exemption.

Baywatch is a Paramount production and Paramount is still based in Hollywood. Unfortunately most all Georgia produced film ventures have out of state financing and out of state ownership thus we never tax their income.

Saltycracker
Saltycracker

You are on your own here, I’ll get a lot more out of watching Baywatch than subsidizing the peanut and cotton growers and their illegal workers……..😎🍺

drjay
drjay

and i was but one of dozens of locals that worked on that particular film, and the non locals spent money here too that would not have fallen under the exemption (for instance one of the crew members asked one of the other extras to buy him a case of beer after being wrapped for the day because the crew guy was not gonna wrap until after midnight)

gcp
gcp

Correct again, but my concern is that neither Ga State University nor GPBI can say this program has an overall benefit to taxpayers. There is propaganda on both sides of this issue so I look for an independent study and so far we don’t have one.

My view is that currently this whole thing is a net loss for taxpayers but maybe after many more years of sufficient growth it may have a net positive effect. I put a link to the state program above and I urge all to read it.