EDITORIAL: No need for special session to subsidize studios

Even giving away money to Hollywood movie studios is a boom-and-bust industry.

In a recent interview, Gov. Joe Lombardo floated the idea of a special session in the coming weeks. Possible agenda items include a bill strengthening criminal penalties and a revived film tax credit proposal. It isn’t hard to see the political motivation for the former.

Democratic Senate Majority Leader Nicole Cannizzaro is currently running for attorney general. Crime is a major concern in Nevada. Just try to buy shaving cream from a brick-and-mortar store without needing an employee to unlock the glass guarding it.

In 2019, Cannizzaro supported a bill that dramatically lowered penalties on felony theft. While many voters might agree that certain aspects of criminal justice reform deserve support, they’re unlikely to be on board with policies that ignore or even encourage more theft.

At least a special session to pass tougher penalties for some lawbreakers might benefit law-abiding Nevadans. The case for subsidizing Hollywood is much weaker.

You may remember that the Legislature debated offering a $1.65 billion increase in Nevada’s film tax credit program. That was to be a 30 percent transferable tax credit on expenses, not taxes paid. In theory, the giveaway would lead to the creation of a Hollywood hub in Southern Nevada.

Assembly Bill 238 passed the Assembly but never made it to Gov. Lombardo’s desk.

Now there’s another reason to hold off on this idea.

Film tax credit advocates have long held up Georgia as the model state. It offers a 30 percent transferable tax credit on expenses. That incentive has lured many movie projects to film in the state. That once included Marvel’s superhero movies. But now Hollywood has decided that the United Kingdom is fantastic for filming.

Despite its generous giveaways, studies have repeatedly shown that these “incentives” do next to nothing to boost the economic fortunes of the states involved. And now, “rising costs in Georgia mean it’s now cheaper to shoot in the U.K.,” The Wall Street Journal recently reported.

The U.K. has a similar tax credit to Georgia. Workers there usually make less, and the government doesn’t require movie companies to pay for health insurance. Even liberal Hollywood companies want to flee government regulations.

The amount of money spent on film production in Georgia has dropped by nearly half compared with three years ago.

There’s now a significant unemployment crisis for Georgians who previously found steady work in the industry. Those stories sound eerily similar to what happened in Las Vegas during past economic downturns.

Gov. Lombardo’s own Office of Economic Development released a report during the session showing film tax credits would be a money loser for Nevada.

That’s a warning lawmakers — and Gov. Lombardo — would be wise to heed.

Special sessions are called special for a reason. Unless the budget collapses, there’s no reason to call one this fall.

The views expressed above are those of the Las Vegas Review-Journal.