The incentives Louisiana provides to motion picture productions have been linked to money spent on early childhood education in the ongoing debate over the state budget in the legislature.
It’s a flimsy fiscal paper chain for now, but a separate measure lawmakers have advanced could ultimately do away with tax credits for movies and TV shows shot here.
House Speaker Clay Schexnayder, R-Gonzales, gained approval this week for a bill that pares down the transfer value for motion picture tax credits from 90% to zero over the next 10 years. Most companies that make movies in Louisiana aren’t based here, so they have to transfer any tax credits they receive to see the cash benefit. State law currently limits transfers to 90% of the credit’s value.
If Schexnayder’s proposal takes effect, the transfer rate will drop to 82.5% on July 1, the start of the state fiscal year. The share would step downward annually, reaching 45% by 2028 and ultimately zero by 2034.
Under current law, the motion picture tax credit program expires in 2025.
The House approved the speaker’s bill and sent it to the Senate for consideration last week. As it advanced through the House, a pinch point for the spending plan was Gov. John Bel Edwards’ proposed $2,000 pay raise for K-12 teachers versus Republican leadership’s preference to put money toward retiring debt in the teacher and state employee retirement systems.
GOP lawmakers argued by paying down the retirement debt, local school districts would then have the resources and flexibility to enact their own teacher salary hikes. Democrats have countered that the state has ample reserves to award teacher raises, though some fiscal conservatives are looking ahead to 2025 when a 0.45% of the state sales tax expires—creating a substantial revenue gap that could threaten recurring costs such as teacher salaries.
Another casualty in the governor’s proposed budget is $51 million for early childhood education programs that would cover some 8,000 students. Democrats were unsuccessful Thursday when they tried to restore this money and the teacher raises during floor debate over the budget.
Speaker Pro Tempore Tanner Magee, R-Houma, then offered an amendment that would make money for early childhood education conditional on the repeal of the motion picture tax credit—the program House lawmakers had already voted to renew in Schexnayder’s bill.
“We should never choose movies, mostly made in New Orleans, over our children,” Magee said on the floor.
This caught Democrats in the House off-guard. Rep. Tammy Phelps, D-Shreveport, asked Magee why he had earlier voted against restorative amendments for teacher raises. Rep. Sam Jenkins, D-Lake Charles, questioned why Magee wouldn’t instead find actual dollars for early childhood education rather than depend on potential money from repealed tax credits.
“Our children are not a contingency for me,” said Rep. Jason Hughes, D-New Orleans, arguing against the amendment.
Magee’s change prevailed and was attached to the House version of the budget approved in a party-line vote. Read the full story about the film tax credit debate from Louisiana Illuminator.