God help everyone hold onto their wallets because the Movie Industry is targeting the Mississippi treasury after successfully looting Louisiana’s with taxpayer funded boondoggle. Geoff Pender promotes the scheme for the Clarion Ledger:
Adam Rosenfelt, a film producer and president of Element Pictures with more than 15 feature films to his credit, including “Mr. Brooks” and “Waiting,” wants to create Mississippix Studios, based in Jackson.
And, he wants to create a new program of film incentives that would result in more money coming in to the state, and permanent jobs. Typically film productions are granted tax breaks or other incentives upfront, shoot for a few months then head back to Hollywood with states often seeing little direct financial benefit. Rosenfelt is proposing the state create a loan guarantee program that serves as a “backstop.” If his company is successful, the state pays nothing, and instead gets 10 percent of his profit.
One big clue the latest scheme is gonna be a problem is the guy in Jackson promoting it is:
- Spreading a BS story about how much he loves the Mississippi coast which is why he’s been 3 and a half hours away in Jacktown for the past year with his nose up Phil Bryant’s hiney. Bryant, never known for private sector financial acumen was likely sucked right in by the promise of getting to hob nob with Slabbed favorite Bull Durham, who was last seen celebrating his successful shakedown of BP back during the oil spill.
- Was a “pioneer in state film incentives, and helped develop Louisiana’s groundbreaking motion picture tax credit program.” This program was groundbreaking in the sheer amount of taxpayer money that has been pissed away into the pockets of people like Rosenfelt, who now splits his time between Los Angeles and Jackson.
In fact pioneering the latest movie industry scheme to fleece the taxpayers is exactly what Rosenfelt is doing in Mississippi because he’d no more live in Jackson, Mississippi than he would Montgomery Alabama if the taxpayers weren’t gonna pay for it some sort of way. Louisiana pissed away over one bllion dollars before people started to ask the critical questions that had not been previously asked about Rosenfelt’s Louisiana film tax credit boondoggle according the Louisiana Budget Project (PDF of their 12 page report can be found here).
One would naturally think that after the financial crash just 5 years ago the problems with Rosenfelt’s scheme would be apparent, especially to Lt. Gov Tate Reeves, who comes from a financial background. Here are Rosenfelt’s talking points:
— Geoffrey Pender (@GeoffPender) January 27, 2014
What they are not promoting is the fact that Mississippi taxpayers would be on the hook for losses if a film does not do well inserting the state clearly into the film industry in the role of loss financier. For GOP types that pretend to be free market capitalists what is being proposed is more precisely called socialism but beyond that I bring up the financial crash of 2008 because it was a implied promise of a backstop aka a Government bailout that caused the problems on Wall Street. More simply put, when someone else is paying for the losses people tend to take uncalculated risks. How soon we forget the concept of Moral Hazard.
Here is the bottom line and why Rosenfelt would never get a bank to make him such a loan under such terms and conditions. Rosenfelt’s movie studio can only make money if someone else is paying for the losers and since banks are not charity organizations they’d never take such a fool’s deal. Don’t get me wrong, if Rosenfelt wants to put down roots in Jacktown, build a movie studio and start making movies without a taxpayer subsidy more power to the man. But if his business plan is predicated on a taxpayer subsidy (and that is exactly what this is), then the Gov should have the sense to tell him to go somewhere else.