Thursday, February 07, 2008

We're Gonna Be in Pictures!

Bet you didn't know that the title is the name of a famous Daffy Duck, and Porky Pig cartoon. Appropriate, perhaps. I can't say it better than Tom Sgouros ( although I wish that I could).

This is not economic development. This is a combination of desperation and intoxication. Desperation that no one in a position of power has any better ideas, and intoxication with something as glamorous as movies.

The result is that we'll spend $1.25 million in state money, in exchange for around $50,000 in new tax revenue and almost a million dollars in economic benefit to the state. What a bargain.

But, but, I could be an extra. This could be my big break. I oughta be in pictures! "And all I got to do is act naturally "

We're the only state to ever think of this. Well, no, maybe, unless you count: New York City, New York State, Milwaukee, Louisiana, Penn., Texas , NM , North Carolina, Washington, Oregon, Baltimore, MD, Tennessee, CT , Las Vegas, NV, Detroit, Illinois, Hawaii, Mass., etc. etc. You get the idea. How many also offer studios with the same tax credit deal? Many.
The state of Louisiana is taking a second look at the tax incentives it has granted movie producers after state lawmakers determined that some of the productions have cost the state more than what it received. (link)

But, but, I LIKE the movies & this is a really good idea.
The result is that so many states (not to mention other countries) offering tax incentives now must cut each other's throat to offer the "better deal" with no real evidence that lost monies (OUR money that has been given away), results in any real economic growth. Umm, isn't this like, kinda important?

There is an actual 2006 report on this precise topic published by the New England Public Policy Center at the Federal Reserve Bank of Boston.
And, when film tax credits do hit their mark and induce more local film production, the resulting stimulus to overall economic activity appears to be rather modest.

And, analysts estimate that for every dollar of revenue lost to film tax credits, between 15 cents and 20 cents of revenue would be recovered from tax receipts generated by stimulated economic activity.

So for every buck we lose we see a return of 15-20 cents? And any jobs tend to be temporary and often unskilled, except for the few requiring Union membership?

“What is the state getting for its money and could we be spending this money on more productive ventures?” said Ellen Frank, senior economist at the Poverty Institute at Rhode Island College.

Gary S. Sasse, executive director of the Rhode Island Public Expenditure Council, a business-backed [emphasis mine] research group, added: “We are concerned that the film tax credit is not creating permanent jobs and investment in Rhode Island.” ( link-Scott Mayerowitz)

Well, duh. You mean we could, like, be doing other things with proven economic benefits?

RIPEC’s Sasse said preferential tax treatment should be given only to industries with “permanent and tangible investments and job creation.” He said there might be more efficient ways to grow the economy, such as more higher education spending. (Projo- above).

You don't say! Well, yeah. Kind of seems like a no-brainer to me. Am I lacking all the details? Could be. I want guarantees. I want clawbacks.

This company, Pacifica Ventures, is proposing exactly the same projects in N.Y., Pa., & L.A., Kiev, etc. Hal Katersky, chairman of Pacifica Ventures, has been the target of lawsuits alleging fraud and mismanagement (RICO).

Katersky (Tiverton native) has been sued dozens of times. Dana Arnold (partner) has no movie experience at all. He has set up at least 30 different companies with "Pacifica" in the title all with a history degree. With Katersky, many different companies have been set up in the past 18 yrs. They have used non-existent ownership of one company to leverage deals to do exactly what they are proposing here. This business is the focus of a 4-part expose by The Citizen Media Group- a non-profit group out of New Mexico. Has anyone read this????
Between 2000 to 2004, Katersky was head of InterGlobal Waste Management, acompany that was supposed to manufacture a computer-based animal waste treatment system called Bio-Loc. The process was supposed to purify run-off contaminated by animals...
The Oklahoma Department of Securities sued the company and Katersky personally, along with other defendants, alleging that Katersky “engaged in an act, practice or course of business that operated as a fraud or deceit upon investors,” according to court documents. He reached a settlement with the department in January 2005.
Katersky has been sued at least 30 times & filed for bankruptcy in 1997. This is a website detailing the world-wide insurance scam he operated out of Australia & Louisiana.

Local filmmakers in N.M. were upset that none of the tax credits actually applied to them. Go figure. Hello! So whaddaya got? Maybe I should have entitled this, "Promises, promises."

No comments: