No, Senator Guillory isn’t concerned with the tax swap’s
alleged impact on low-income households in his district.
He’s not concerned with the proposal to tax services like
haircuts and grass cutting.
So, what part of Governor Jindal’s plan to overhaul
Louisiana’s tax system does Guillory take issue with? The state’s film tax
credits.
That’s right, Senator Guillory told Governor Jindal that he
will fight the Governor’s plan to change the film tax credit.
Obviously, protecting the film industry in Opelousas means
more to Senator Guillory than the plan’s impact on his constituents.
The film tax credit allows companies to receive state tax
credits to offset their labor and purchases in the state. The film companies
then sell the tax credits to brokers and receive cash, typically 15-30% of the
tax credits face value. The brokers then resell the tax credits to the wealthy
to offset their personal income tax.
Does it help the film industry? Sure. The film companies get
a cash infusion. Does it help the wealthy? Of course. Why does a State Senator
from Opelousas care? I have no idea.
The bottom line is that Governor Jindal isn’t proposing to
scrap the film tax credit but, he is seeking to alter it.
Currently, tax credits on personnel costs are not capped and
the Governor wants to limit the amount of tax credits for Hollywood stars and
Directors to $1 Million per film. Now, if Robert De Niro stars in a film
produced in New Orleans, and earns $20 Million for the film, Louisiana gives
the film company a tax credit for the $20 Million, even though De Niro will
take the bulk of his salary out of the state.
If the money is leaving the state, and that portion of the
film tax credit doesn’t help the state, it makes sense for Louisiana to change
it, right?
Jindal calls the changes a “slight alteration”.
Not according to Senator Guillory.
In a letter to the Governor, Guillory said:
"(Y)our plan
to impose a salary cap on above-the-line individuals (like providers of cast
members) at $1 million is not a 'slight alteration.’”
"It would
truly be ironic to abandon a growing Louisiana industry in an effort to grow
industry in Louisiana," Senator Guillory said.
Stephen Moret,
the state’s head of Economic Development, reiterated that Louisiana is
committed to the film tax credit.
"We’ve
worked to support the growth and development of the industry since day one,
even supporting legislation that increased the value of the incentive program
and made it permanent,” Moret said.
"Louisiana’s
film tax credit program shouldn’t be subsidizing the economies of other states,
such as California or New York, which is why our proposed changes will re-focus
tax credits on those activities that promote spending in Louisiana. For
expenditures that actually impact the Louisiana economy, there would be little
to no effect from these changes."
Moret expects
little to change in the way of proposed films to be produced in Louisiana.
Moret said his
office "recently spoke with several of the major studios, and they
continue to plan major feature film projects in Louisiana.”