Two unpublished reports commissioned by the Nevada Governor’s Office of Economic Development and obtained by The Nevada Independent indicate that heavily lobbied efforts to expand the state’s existing film tax credit program are likely not financially sustainable.

The reports produced by Applied Economics, an Arizona consulting firm, show that the two proposed measures, both of which would increase the existing annual $10 million in film transferable tax credits more than eightfold, would have a negative return on investment for every dollar invested by the state. 

It marks the most complete independent financial picture to date of both proposals, as lawmakers were previously only shown analyses from groups contracted by proponents. The independent reports offered a much more pessimistic view, particularly surrounding the proposal from Sen. Roberta Lange (D-Las Vegas) backed by Birtcher Development.

The state-commissioned reports have not been publicly released, but news of their existence comes with one week left in the legislative session and amid continued uncertainty about whether there will be enough support in the Legislature and governor’s office to make the film studios’ dreams a reality. 

Elizabeth Ray, a spokesperson for the governor’s office, attributed the delayed release to the evolving nature of the film tax bills.

“The final reports were given to committees and legislative leadership on Friday, May 23, 2025,” she wrote in an email. “The reports were scheduled to be released to the public on the next business day [Tuesday].”

Legislators in support have praised the proposed tax credit expansion as a way to diversify Nevada’s tourism-dependent economy. Republican Gov. Joe Lombardo has declined to comment on his stance on the legislation but indicated at an IndyTalks event earlier this year that he would need more financial details.

There was more momentum surrounding AB238, proposed by Assm. Sandra Jauregui (D-Las Vegas) and backed by Warner Bros. Discovery and Sony Pictures Entertainment, which advanced out of committee Saturday — a milestone Lange’s bill has not yet achieved. 

The independent report on Jauregui’s bill showed a fiscal return on investment ($0.52 for every dollar invested) higher than what proponents of the measure projected ($0.46 for every dollar). However, this is a minimal change likely within the margin of error. 

The report also expected an economic return on investment (measured in how the project could, directly and indirectly, affect the regional and statewide economy) of $26.79 for every $1 of tax credits. In other words, moving film production to Southern Nevada could generate significant economic activity, but the amount of tax revenue government entities would recoup from it would fall far short of breaking even with how many tax credits were invested to spur the activity.

And still, authors of the independent analysis cautioned that those economic returns on investment are harder to project.

“There is no way to verify that the indirect and induced impacts are happening in Nevada in response to this specific development,” the report noted, adding that the difference in direct, indirect and induced impacts from proponents of Jauregui’s bill was two to six times higher than the Applied Economics’ estimates.

The report still noted that although the studio development would directly and indirectly stimulate new economic activity in the state — the goal of economic development — it would not be enough to offset the state’s investment.

“Comparing the estimated total increase in production value in the private sector to the amount of tax credits does not ensure that sufficient new tax revenue will be generated for this type of incentive to be sustainable,” the report on the Warner Bros. and Sony proposal noted.

The projection on Lange’s bill (SB220) was more bleak.

Applied Economics indicated that proponents of Lange’s proposal significantly overestimated the return on investment for every dollar of tax credits invested.

The independent report’s estimate of state and local tax revenues on Lange’s proposal came in 341 percent and 169 percent lower, respectively, than the analysis by the firm hired by Birtcher Development and other backers.

Applied Economics described the findings as “generally significantly different results” that could be attributed to differences in modeling, industry assignments for each part of the development proposal and methodology used to estimate the fiscal effects. 

Estimates from Applied Economics show that on Jauregui’s bill, the state tax revenues would be about 6 percent lower and the local tax revenues about 5 percent lower than projected by proponents. 

As proponents of both measures have touted the job creation aspect of the proposals, the independent analysis estimated fewer jobs than proponents’ projections.

Proponents of Jauregui's bill projected about 1,000 more construction jobs than the independent analysis did, in addition to roughly 4,500 more office and film production-related jobs.

Meanwhile, the analysis conducted by proponents of the Lange proposal estimated 2,400 more onsite jobs than the independent report did.

The report did not analyze a recent change to Jauregui’s proposal, which would create a special district with tax revenues supporting pre-K in Clark County across the next 17 years. Presenters estimated the district would bring about $11 million annually to support those services.

This story was updated on 5/26/2025 at 4:31 p.m. to include a statement from the governor’s office.