Picture this: Your state is facing budget cuts and uncertain times. But lawmakers are seriously considering handing out over $2 billion in tax credits to Hollywood studios. Welcome to Nevada’s film tax credit debate.
What’s On The Table
Two different bills are competing in Nevada’s legislature right now. Both want to dramatically expand the state’s film tax credit program from its current $10 million per year to massive new levels.
The first proposal, sponsored by Senator Roberta Lange, would give away $98 million annually for 18 years. That’s a total of $1.6 billion in tax credits. The second, backed by Assembly member Sandra Jauregui and supported by Sony Pictures and Warner Bros., calls for $95 million annually for 15 years, totaling $1.4 billion.
Now Senator Lange is proposing to merge both bills. Her new plan would cost taxpayers even more – about $2.2 billion over 18 years. The combined proposal would hand out $120 million annually to film studios starting in 2028.
To put this in perspective, that’s twelve times bigger than Nevada’s current film tax credit program. It’s like going from buying a cup of coffee to buying a luxury car every single day.
The Numbers Don’t Look Good
Here’s where things get interesting for taxpayers who care about getting value for their money. The state commissioned an independent study by Arizona-based Applied Economics to see if these tax credits would actually pay for themselves.
The results? Not so much.
For every dollar Nevada gives out in film tax credits, the state would only get back about 23 cents in state tax revenue. Local governments would see about 12 cents per dollar. That’s like investing $100 and getting back $35 total.
The Nevada Studios project proposed in Senator Lange’s bill would generate only 35 cents of state and local tax revenue for every $1 in tax credits over its 18-year period. That’s substantially lower than what the bill’s supporters claimed – they said it would bring in $1.36 per dollar.
This mirrors what happened in Georgia, where a similar program now costs about $160,000 for every job created and generates just 19 cents for every dollar spent.
What The Critics Are Saying
Conservative fiscal watchdogs aren’t the only ones raising red flags. Progressive groups are also pushing back, but for different reasons.
“This week the Legislature passed the Governor’s Education Budget with only a $2 increase in per-pupil funding and tabled AJR1 to help Pass The Plan to fund public education,” said Dawn Etcheverry, president of the Nevada State Education Association. “Now, lawmakers are considering giving away $1.65 billion in public money to Hollywood executives”.
Battle Born Progress Executive Director Shelbie Swartz called the tax credits “an unprecedented corporate handout” and said “lawmakers and Nevadans everywhere deserve transparency and the full release of this analysis to see just how bad this deal really is”.
Assembly member Brian Hibbetts, a Republican who initially supported one of the bills, said the state’s analysis:
“does not bode well, in my opinion, for either one of those measures”.
Why This Matters To Conservatives
For conservatives who believe in limited government and fiscal responsibility, this issue hits several key concerns:
Picking Winners and Losers: Government shouldn’t be in the business of choosing which industries get special treatment. When politicians hand out tax credits to Hollywood studios, they’re essentially forcing regular taxpayers to subsidize wealthy entertainment companies.
Corporate Welfare: These tax credits are determined by production costs, not profits, and many credits are transferrable or refundable. When a film’s tax liabilities are below its allotted refundable credits, taxpayers end up directly paying film companies the difference.
Opportunity Cost: Every dollar given to film studios is a dollar that can’t be used to cut taxes for working families or fund essential services. Nevada’s per-pupil education funding ranks among the lowest in the nation.
Economic Reality: Independent studies consistently show that film tax credits don’t pay for themselves, so state taxpayers bear the burden. The economic activity induced by these subsidies generates insufficient tax revenue to offset their cost.
The Track Record Elsewhere
States are starting to realize that the economic benefits of film tax credits are pure fantasy. Since 2012, Alaska, Michigan, and Illinois all ended their film tax credit programs after realizing they weren’t getting good value for taxpayer dollars.
In Massachusetts, a state report looking at the first 11 years of their program found that while productions added $615.5 million to the state economy, they ultimately cost taxpayers $652.8 million. The program created one job for every $102,945 spent by the state.
What Supporters Are Promising
Proponents argue these tax credits will diversify Nevada’s tourism-dependent economy and create thousands of high-paying jobs. Senator Lange said the project would generate over 10,000 new jobs, $750 million in wages and economic impacts projected to reach “tens of billions” of dollars.
Assembly member Sandra Jauregui claimed “the legislation will generate $3 billion in annual economic activity” and compared it to “Wrestlemania 15 times a year”.
The problem? These claims consistently prove to be inflated. The jobs and economic growth created by film productions are often overstated, and the jobs that are created are highly skilled and mobile, meaning they don’t create lasting economic benefits.
The Timing Issue
What makes this debate particularly frustrating for fiscal conservatives is the timing. Nevada is facing economic uncertainty, yet they’re considering massive handouts to one of America’s wealthiest industries.
It’s similar to what’s happening in California, where Governor Gavin Newsom is proposing to more than double film tax credits to $750 million while simultaneously cutting funding to public universities and health care.
What’s Next
The Nevada legislative session ends soon, so lawmakers need to make a decision quickly. Governor Joe Lombardo hasn’t taken a clear position, saying he needs more financial details.
Several key lawmakers, including Senate Majority Leader Nicole Cannizzaro and Senate Finance Chair Marilyn Dondero Loop, told reporters they were still assessing the proposals.
The bottom line is simple: Nevada taxpayers deserve better than a deal that gives Hollywood studios billions while getting back pennies on the dollar. Real conservatives should oppose corporate welfare in all its forms – even when it comes with red carpet glamour.
This article was written with the assistance of AI. Please verify information and consult additional sources as needed.
