If you could buy something directly for $90, would you pay a middleman $100 to buy it for you? Of course not; it would make no sense. Not even in a movie filmed in Oregon.
But that is, in essence, how Oregon subsidizes film production in the state. Through the Film Production Donation Tax Credit, Oregon pays $100 to a small, fortunate group of taxpayers for every $90 to $95 that they donate to a film production fund. The fund then subsidizes the filmmakers.
The inherent inefficiency in the current film production tax credit scheme — let alone the 167 percent expansion that the Governor is proposing — is one that the state can ill afford, as it faces a large revenue shortfall. If subsidizing in-state film production is a worthwhile use of taxpayer dollars, then the legislature should fund it directly out of the General Fund or Lottery Funds. With the tax credit program set to expire this year, this is an opportune time for the legislature to fix the inefficiency by changing the funding for the program from a tax credit to a direct appropriation.
How the state film subsidy program is inefficient by is using middlemen to fund the program.
The extent to which the State pays the middlemen handsome profits that could otherwise fund public services.
How much taxpayers would lose under Governor Kitzhaber's plan to continue the tax credit program for six years and expand it by 167 percent.
Then come back here and discuss.