Representatives of Georgia’s film and television industry gathered in Athens last week to urge state legislators to keep the generous tax credit that’s turned the screen sector into a multi-billion-dollar business.
Lawmakers are considering paring back the 20–30% tax credit, implemented in 2008, because they are worried the state is losing out on hundreds of billions of dollars in revenue. However, consultants and industry leaders warned them that, without the credit, the explosive growth in film and TV productions could easily be reversed.
A report commissioned by the state from London-based consultants Olsberg SPI found that film and TV grew from a $900 million to a $4.3 billion industry in Georgia between 2012–2022. It employs almost 60,000 Georgians at an average salary of $86,000 a year, well over the state average. In addition, investors spent $1.3 billion building studios. Consultants calculated that the return on investment, as far as economic development goes, is $6.30 for each dollar of tax credit.
“I can tell you very emphatically, those dollars would not have been invested… without the tax credit,” Frank Patterson, president of Trilith Studios in Fayetteville, told the Joint Tax Credit Review Panel during a hearing at Athens Tech Oct. 4. “It’s the confidence investors need that comes with the tax credit, and really the reputation Georgia has for being a very good business environment.”
Olsberg SPI’s numbers might even be low, Patterson said. Trilith isn’t just 32 studios—it’s an entire town with 1,100 residents and 65 businesses.
A survey of producers found that 92% of producers would not have shot their production in Georgia without the tax credit. “This is really a very important finding,” Olsberg SPI economist Eleanor Jubb said. “We can be confident that most of the investment that happened in Georgia would not have happened without the tax credit.”
Some lawmakers questioned the study’s numbers and methodology, though. “No doubt it’s been a boon to Georgia getting jobs to come here. I just don’t know if I’m comfortable with a survey saying, ‘Would you come here or not?’” said Sen. Chuck Hofstetler (R-Rome), the panel’s co-chair. Others said the salary figures looked off, or that the study didn’t include return on investment in terms of tax revenue film and TV generate or a comparison to the ROI for other industries that receive tax incentives.
Tony West of the libertarian group Americans for Prosperity said legislators should trade tax incentives for across-the-board tax cuts. “Tax policies should not pick winners and losers,” he said.
A few conservative lawmakers have long questioned the film and TV tax credit on moral or cultural grounds, but this is the first time since its creation that the legislature is seriously considering scaling it back. During last spring’s session, Hustetler proposed a $900 million cap.
Earlier this year, UGA economist Jeffrey Dorfman told the panel that tax credits make sense for growing industries, but film and TV is now a “mature industry,” so they make less sense and should be scaled back. However, Olsberg SPI managing director Leon Forde told the panel Wednesday that the industry is global, so productions can easily pick up and move to whichever place is offering incentives. “They [incentives] guide where these productions are sited around the world,” Forde said.
After the hearing at Athens Tech, panel members toured nearby Athena Studios, Athens’ first major studio that just opened earlier this year.
Charles Davis, dean of UGA’s Grady College of Journalism and Mass Communications, did not explicitly endorse the tax credit, but spoke favorably about the college’s entertainment division and its partnership with Athena Studios and founder Joel Harber. “ Our goal is to [educate] Georgians for Georgia jobs, and it’s working,” Davis said. “… None of this would exist without the growth of the film industry in Georgia.”