Bad Bill of the Week: More Corporate Welfare for Hollywood Cronies

The glitz and glamour of movie and television production in North Carolina apparently is just too tempting for several North Carolina legislators to pass up. Unfortunately, they are willing to use your tax dollars to bribe more Hollywood big shots to come to the Tar Heel State.

For years, NC featured a generous state tax credit for qualifying film production expenses. This program amounted to doling out political privilege to a politically-connected industry, creating unfair advantages for film production and distorting the state’s arrangement of productive resources compared to what they would be in a free market.

This tax credit was allowed to expire as of the end of 2014, but the 2014-15 state budget included a film production grant program of $10 million to offset a portion of qualifying film production expenses.

But to the supporters of House Bill 171 (and its equivalent, Senate Bill 193), $10 million in taxpayer handouts to Hollywood fat cats is just not enough.

The legislation would expand the annual amount of the fund to a whopping $66 million.

Reps. Ted Davis Jr. (R-New Hanover), David Lewis (R-Harnett), Jason Saine (R-Lincoln) and Frank Iler (R-Brunswick) are primary sponsors of the House bill. Meanwhile, Sens. Michael Lee (R-New Hanover) and Bill Rabon (R-New Hanover) are primary sponsors on the Senate version of the bill.

Of course, every penny of the $66 million that would be handed to film production companies under this legislation would first be taken from hardworking taxpayers across the state.

Legislators will claim they are “creating jobs” with the taxpayer handouts, but that is nonsense. Every job supported by taxpayer handouts hurts job growth and investment elsewhere in the economy. Government cannot create jobs, it can merely shift around the mix of jobs. Such exertion over the control of the state’s productive resources – including labor – is a form of top-down central planning, period.

Moreover, intrusive meddling into the economy invites more political patronage, as other special interest groups see willingness to promote corporate welfare for one industry as a sign that state legislators may grant them political privilege as well. As a result, the halls of the state capitol swell with lobbyists.

Because it creates unfair political privilege, distorts and thus harms the economy, smacks of central planning and invites more political patronage; House Bill 171/Senate Bill 193 is the week’s Bad Bill of the Week.