Hollywood screenwriters aren’t the only ones peddling fiction — lobbyists for the industry have been doing it for decades as a way to raid public treasuries. 

As expected, debate about dramatically expanding Nevada’s film tax credit subsidy is finally taking place in Carson City. After a similar proposal failed in the last legislative session, Sen. Roberta Lange (D-Las Vegas) and Assm. Sandra Jauregui (D-Las Vegas) have committed to resurrecting the concept, with Jauregui’s proposal (AB238) being heard this week. 

Both proposals would represent an eightfold increase to the state’s $10 million transferable tax credit program for film production — following in the footsteps of numerous other states that have dangled dollar bills in front of studio executives looking for production locations. Georgia is spending more than a billion dollars per year on such tax credits, Texas is considering radically expanding its incentive structure and even California is discussing the possibility of doubling the amount of credits it awards moviemakers in an effort to keep studios from calling other states “home.” 

As with those film subsidies elsewhere, however, Nevada’s proposed expansion would effectively be little more than bribery with public dollars. No wonder studios have long committed themselves to pressuring lawmakers for such programs. Who doesn’t like “free” money? 

Considering the fiscal restraints Nevada faces, one has to wonder if giving away $80 million in “free money” to major Hollywood studios is really the most appropriate use of our limited resources. After all, the need to improve educational outcomes, prop up our failing health care system and grapple with likely cuts to federal funding are all challenges to broad economic prosperity throughout the state — and each one of those challenges could use a bit of the money lawmakers are about to consider gifting to the movie industry. 

Proponents of such corporate welfare, however, claim the economic activity generated by industry big shots moving into our backyard will more than make up for the tens of millions of dollars in tax revenue lost to the credits. According to their economic models, the public money invested in such a scheme will trickle down to ordinary Nevadans through new job opportunities, local spending by the studios and new facilities and programs built for the industry. 

It’s not a new or imaginative narrative. It’s roughly the same story that has been told every time the industry lobbies lawmakers in a given state to boost its profits with public money. 

Judging by the lived experience of those other communities, however, widespread economic development is hardly a foregone conclusion in exchange for such corporate handouts. There’s a reason most serious economists downplay the supposed benefits of film tax credit schemes: There’s little data to suggest it works.

The New York Department of Taxation and Finance, for example, estimates its incentive program generates a measly 15 cents in direct tax revenue for every dollar it doles out. And a 2023 audit conducted by Georgia State University’s Fiscal Research Center found that the Peach State’s tax credit program had actually experienced a negative impact on net job creation, with each industry job created by the program costing taxpayers $160,000 per position. 

Other states have seen similarly dismal returns on their moviemaking investments. 

Jauregui and Lange’s proposals aim to mitigate these risks by ensuring studios commit to certain levels of investment in the local community. Nonetheless, such commitments aren’t likely to offset the opportunity costs associated with shoveling tens of millions of public dollars into the pockets of private businesses. 

Whether it’s a massive stadium for some sports franchise or a production lot for some Hollywood studio, socializing the cost of economic development while privatizing the profits is a recipe for economic ruin in the long run. 

Even with studios pledging to invest in the local community, the film industry has proven itself to be an unreliable partner for economic growth when more advantageous tax credit programs are offered elsewhere — hence the bidding war between states (and nations) in recent years. Regardless of how spendthrift lawmakers decide to be with money from our state treasury, it seems there will always be plenty of alternative locations to which studios might flee in coming years if it suits their financial interests.  

Diversification of Nevada’s economy is certainly a worthwhile pursuit, but not if it means being held captive by an industry that has proven so insistent on public dollars in exchange for its loyalty — especially when real-life experience suggests the benefits are far less robust than its lobbyists suggest. 

Proponents of both film tax credit proposals insist that gifting moviemakers tens of millions of dollars will somehow transform Las Vegas into a thriving “Hollywood 2.0.” We’re to believe that the profits made by a few favored industry insiders in this new Tinseltown will somehow trickle down to ordinary Nevadans and we’ll no longer rely exclusively on tourism for our regional prosperity. 

That narrative certainly paints a pretty picture, but it’s wholly untethered to the fiscal or economic reality we’ve seen elsewhere when such schemes have been attempted. In the end, lawmakers have far better things to spend our money on than the obviously fictitious fairytales spun by lobbyists who work for some of the world’s largest movie studios.

Michael Schaus is a communications and branding expert based in Las Vegas, Nevada, and founder of Schaus Creative LLC — an agency dedicated to helping organizations, businesses and activists tell their story and motivate change. He has more than a decade of experience in public affairs commentary, having worked as a news director, columnist, political humorist, and most recently as the director of communications for a public policy think tank. Follow him on Twitter @schausmichael or on Substack @creativediscourse.