Amid the rosy picture, Georgia’s film credits have faced stiff criticism from some local tax analysts and economics experts, including a pair of harsh reports from the state’s own internal auditing department. Last year, state auditors questioned whether economic-development officials had inflated the film industry’s spending impacts by several billion dollars – a charge that drew swift backlash from the credit’s supporters who said the estimates were accurate.

J.C. Bradbury, an economics professor at Kennesaw State University, has also slammed the state’s film-related economic estimates, calling the motion-picture business in Georgia “a very small part of the economy.”

“It’s very, very expensive,” said Bradbury, who authored a study criticizing the state’s estimates for 2018 and calculating the credit program’s cost to each taxpaying household at $220 per year. “There have been no peer-reviewed studies that indicate there is any [economic] benefit from this.”

See the flow of film tax credits in a given fiscal year. (Credit: Brittney Phan for State Affairs.)

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Critics frequently point to the amount of tax revenues Georgia never collects due to the credits as a reason for reining in the incentive program’s scope. Film credits potentially ate up roughly $1 billion that Georgia may have generated in tax revenues during the 2020 fiscal year, rounding out to about 3% of the state’s total budget, according to the state’s most recent annual tax expenditure report.

“As the evidence demonstrates, the state did perform well on attracting the (film) industry and creating jobs,” said a study published last year by Augusta University researchers. “However, the cost of the program raises questions about return on investment, which is relatively low, and the sustainability of a high-cost program.”

Even the number of jobs created by the film industry is contested. The MPAA in 2018 claimed some 92,000 jobs were created locally by productions, but the Augusta University researchers put that number closer to 15,000 in 2017, citing federal labor figures. In a 2019 policy brief, Bradbury estimated a more “realistic” number was around 32,000 jobs. 

Local workers in Georgia and those from other states make up different shares of jobs and wages involved in credit-receiving film productions. (Credit: Georgia Department of Audits and Accounting)

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The credit program’s supporters have countered that it’s impossible to measure how much the state actually loses in tax revenues from the credits, given many film companies may never have picked Georgia in the first place without the incentive.

No one is calling for an outright end to the credit program, Bradbury said, noting the local presence of major studios such as Tyler Perry Studios and the U.K.-based Pinewood Studios as signs of the film industry’s permanent impacts. Rather, critics have pushed for more sunshine on the credit program to better understand its scope, echoing claims from state auditors last year who found lax oversight on what kinds of spending by film companies end up qualifying for credits. Those findings prompted state lawmakers to pass a bill last year requiring that all credits be audited for accuracy over the next few years, rather than just a portion, as was previously the practice.

Prior to 2021, Georgia was one of only three states that did not require audits for individual film credit applications. State lawmakers changed this policy in mid-2020 to require audits. (Credit: Georgia Department of Audits and Accounts)

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While that bill aimed to boost transparency, it’s still difficult to track results of film-credit audits. State revenue officials denied State Affairs’ request to review individual credit audits conducted so far this year, citing state law that bars public disclosure of tax-related documents. Similarly, public records on who is awarded credits, in what quantity and who buys and sells them are also withheld on confidentiality grounds.

“The amount of information they’re able to withhold is really unfortunate,” said the GBPI’s Kanso. “It’s one of the contributors against giving Georgians the facts to make a decision.”

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NEXT

Part V: The Market of Film Credits