The opportunity cost of film subsidies

The opportunity cost of film subsidies

Pay raises for teachers. New investments in early childhood education. Infrastructure projects. Those are just some of the things Louisiana could buy with the money it spends each year to underwrite film and TV productions. Last week another study came out that confirmed what every other reputable study has also shown: the film subsidy program is a money-loser for state government. The Advocate’s editorial board weighs in:

You could make a list of dozens of suggestions for spending such a sum, but Edwards and legislators would rather argue over how to pay for those ostensible priorities than do the simplest thing: Eliminate the state’s film tax credit and save the taxpayer about $100 million a year. For every dollar that the state spends on tax credit programs for the entertainment industry — and those are mainly the film credits — state and local governments combined get about 36 cents back. So the state blows two out of three dollars, totaling about $100 million of the $150 million authorized every year. And that waste is down, incredibly, from years when the state larded out the Hollywood credits on an even larger scale. It’s now capped at the $150 million level, and those films getting in the queue receive 40 percent credits for their in-state production.


Cutting child poverty in half
As things stand now, when a child is born into poverty, more often than not they will never catch up to their middle- and higher-income peers. A child growing up in poverty will likely see adulthood with a lower income, very little savings and more health problems than those whose families have more resources when they are young. And child poverty doesn’t only do lifelong harm to people born into impoverished families, it also has a significant impact on our government and economy, costing the nation more than $1 trillion each year. But a new consensus study by a committee from the National Academies of Sciences, Engineering, and Medicine points out policy solutions that can change these outcomes, and lays out a plan for cutting child poverty in half in ten years. Ron Haskins and Timothy Smeeding, who both served on the committee, share their findings with The Brookings Institute in an op-ed:

In examining the effectiveness of current government programs, we found that a number of them, in particular the supplemental nutrition assistance program and refundable tax credits, have been effective in reducing child poverty and improving child health and achievement. We also examined the experiences of peer countries and found that the United Kingdom was able to reduce its child poverty by 50 percent, and that Canada is poised to do so as well. We then formulated a set of 20 proposals for expanding existing programs or starting new ones. We also combined some of those into four program packages. … Nations must be judged by the way they treat their children. If our country is actually serious about reducing child poverty and promoting economic opportunity and upward mobility for all children, it is going to have to implement better solutions. Other countries have demonstrated that where there is a will, there is a way to accomplish this goal. Without strong action by policymakers, poverty and its inevitable consequences will continue to impose great costs on children, families, and the nation.


The cost of keeping CenturyLink
Gov. John Bel Edwards and other political leaders celebrated this week when a deal was announced that will keep CenturyLink headquartered in Louisiana through 2025. That’s excellent news for the Monroe region, but it also comes at a cost. As The Advocate’s Sam Karlin reports, the state will dole out up to $17.5 million to the telecom giant over the life of the deal, and will no longer penalize the company if it fails to meet certain payroll targets.  

The agreement, struck by Gov. John Bel Edwards’ administration well in advance of a 2020 expiration of an agreement the company was operating under, represents the third time in the past decade the state has offered tax incentives to the company in exchange for keeping its headquarters in Monroe. Announcing the deal Tuesday, Edwards lauded the company’s “uniquely Louisiana story” and said the new agreement will continue driving the state’s tech economy. … The tax incentives are capped at $2.5 million a year and earned if payroll targets are met. The company could get a total $17.5 million if it hits all the targets through 2025. If it falls below $57.5 million in in-state payroll, the agreement is terminated. The company currently has roughly $200 million in in-state payroll, (administration attorney Matthew) Block said.


Medicaid working as intended
Louisiana Department of Health sent out notices to 40,000 Medicaid enrollees earlier this year asking them to verify income requirements or they would be kicked off the program. This month 30,500 of them lost their state-sponsored health coverage. That’s largely due to a new electronic verification system that makes more frequent checks to ensure that people don’t earn too much money to qualify for the program. Melinda Deslatte of The Associated Press has more:

Three-quarters of those who received the letters — 30,500 people — lost their benefits at the end of March, said agency spokesman Robert Johannessen. Nearly all of them are non-elderly adults enrolled through the Medicaid expansion that Democratic Gov. John Bel Edwards enacted in 2016. … An upgraded computer system identified those who were deemed ineligible for Medicaid coverage. The system does quarterly eligibility checks, rather than previously performed annual checks, and uses more wage data for comparison. … Health department leaders say some people enrolled through Medicaid expansion likely have fluctuating or seasonal changes in employment that could keep them going in and out of the Medicaid program throughout the year, as their wages change.


Number of the Day
$1.1 trillion – The aggregated  annual cost of child poverty for the United States. (Source: The Brookings Institute)