* Gov. Rod Blagojevich has been one of the top cheerleaders for the movie industry tax credit, which was just recently renewed by the General Assembly. But…
…at least 30 other states are facing budget deficits besides Illinois, legislators have been pushing to subsidize some of America’s most affluent businesspeople at the expense of taxpayers. At least 40 states currently offer film subsidies, some offering upward of 30 percent to 42 percent of a movie’s production costs.
These tax credits do not pay for themselves, much less bring in extra revenue. Greg Albrecht, chief economist for Louisiana’s Legislative Fiscal Office, estimated in 2004 “that for every dollar of revenue lost to film tax credits,” only 15 to 20 cents “of revenue would be recovered from tax receipts generated by stimulated economic activity.”
According to Albrecht, even the most “successful” film subsidy programs bring little value. In Louisiana, he found, “even if 100 percent of the reported production budget amounts were being spent purchasing goods and services from Louisiana suppliers, the economic benefits would not be sufficient to provide tax receipts approaching a level necessary to offset the costs of the tax credits.”
The jobs and economic growth created by film productions with the help of such tax incentives are often overstated. The New England Public Policy Center at the Federal Reserve Bank of Boston found that “when film tax credits do hit their mark and induce more local film production, the resulting stimulus to overall economic activity appears to be rather modest.”
The tax credit may have more to do with the governor’s Hollywood fundraising and the international cachet for Chicago. Still, the movie tax credits have “worked” to the extent that far more films are being shot in Chicago than before the credit was approved. That’s a good argument for keeping it in place.
* However, while the glitz and the glamour are given governmental favor, Downstate gets the shaft…
Gov. Rod Blagojevich says Illinois residents should know he didn’t want to shutter seven state parks and a dozen historic sites, but he needed to make the closings to balance the budget.
Blagojevich put out the statement Sunday, the same day the parks and historic sites were to close. In the statement, the governor asked Illinoisans to understand that the closings had to be made to offset a $2 billion budget deficit.
The governor said he would “continue to take steps to reduce the shortfall so that Illinois has a budget that works.”
We’re talking about $2 million here. That’s a rounding error on a rounding error.
* These parks and sites are far more economically important to small Downstate communities than the movie industry is to Chicago…
By the end of [yesterday], the gates will also close at Castle Rock and Lowden state parks, two of the strongest drawing cards for businesses in nearby Oregon, Ill., about 100 miles west of Chicago.
“Gas, grocery stores, motels, resorts,” said Marcia Heuer, executive director of the Oregon Area Chamber of Commerce, rattling off local businesses that depend on park visitors.
The two parks draw just shy of 400,000 people a year, and are the cornerstone of the chamber’s marketing, she said, particularly the 48-foot-tall statue, 100-ton statue, The Eternal Indian, at Lowden.
Yet, they get nothing.
* And it’s not just state parks and historic sites feeling the pain…
“Politicians are fond of criticizing deadbeat parents who refuse to meet their obligations, but state government is becoming the biggest deadbeat of all,” alleged the Rev. Frederick Aigner, president of Lutheran Social Services of Illinois, in a prepared statement last week.
He decried the state’s almost $9 million in unpaid reimbursements to the organization for family and community service work.
“If the state doesn’t move quickly, we and many others across Illinois are going to be forced to make drastic cuts in services that will hurt every community in the state,” Aigner wrote.
* Universities were hit last week as well…
The Blagojevich administration is asking Illinois’ universities to place 2.5 percent of their budgets in reserves. The cuts mean four-year universities would lose nearly $35 million from their budgets. The state’s community colleges would drop nearly $8 million.
University of Illinois spokesman Tom Hardy says the school’s president, Joe White, told the campuses to prepare for cuts earlier this fall. Campus officials were to present contingency plans to White by next month. The Chicago campus already announced it was cutting 200 jobs at its medical center.
* But, like the state, the U of I still funds the glitz and glamour…
With oversize leather chairs, Oriental rugs, computer labs and classrooms, the Irwin Academic Services Center is a great place to study - if you’re an athlete.
The $6 million University of Illinois tutoring center helps only about 550 of the school’s 37,000 students. […]
The UofI center, with an annual budget of nearly $1 million, is staffed with tutors, counselors and learning specialists like Debby Roberts.
* Related…
* Gov to transit agencies: Hike fares, I’ll freeze pay
* Budget troubles raise plenty of questions
* SJ-R Opinion: Governor’s delusions catch up to us
* Illinois’ budgetary ‘Doomsday’ hits home with layoff, site closures
* Historic sites, some parks to close after Sunday
* State park closings a tough pill for some to swallow
* Unjust governor ignores will of the people
* Blagojevich taps deputy gov Martinez
LIVE session coverage...
- Fire Ron Guenther - Monday, Dec 1, 08 @ 9:29 am:
That study center for athletes would be a lot more palatable if the football team was any good.
- Wumpus - Monday, Dec 1, 08 @ 9:48 am:
If you basically have a full time job while in school, I can see the need to have a special tutoring center, especially when admission rules are violated to get many of these atheletes into this prestigious university. I guess it is a good thing that they cheated/stole a spot in a BCS bowl game last year.
- anon - Monday, Dec 1, 08 @ 10:02 am:
Martinez is a solid choice to fill this position. He is a strong leader and has the experience to see that government runs smoothly. This is also a huge boost to the Latino community.
Great job!
- phocion - Monday, Dec 1, 08 @ 10:04 am:
I’m glad that the mainstream media finally is looking at the ridiculous tax credit giveaway for the film industry. This was a sham from the beginning - and no one seriously addressed the assumptions that it was supposed to be a net gain to Illinois. It clearly is not. What it was all along was Blagojevich’s attempt early on to curry favor and support from the Hollywood crowd to support his Presidential aspirations (hard to believe now that this was really seriously considered). Of course, the California crew found an Illinois politician to get behind — but his name aint Blago. Hopefully Springfield can let this sick dog of a corporate giveaway die a fast death.
- Phineas J. Whoopee - Monday, Dec 1, 08 @ 10:30 am:
Blago was playing political football by using the park and historical sight closings to punish his enemies. Well now the chickens are coming home to roost, the economy has tanked and he really does have to close the parks. Instead of finding permanent and creative ways to fund these attractions when it was possible to do so, i.e. user fees, local funding, volunteerism or corporate donations, we are left with hind sighted excuses and begging for funding from the federal government. The Blagojevich administrations’ political manipulation is the reason the parks are closing-plain and simple. Absolutely deplorable lack of leadership and abuse of power.
- Jake - Monday, Dec 1, 08 @ 10:33 am:
The U of I athletic Dept is self-funding through donations and revenues (tickets, endowments, downations, radio/tv revenue, concessions, etc). Neither taxpayer dollars nor tuition pay for the Irwin Center.
Sure it makes great copy, but it isn’t the whole truth.
- SangamoGOP - Monday, Dec 1, 08 @ 10:35 am:
Yesterday, the Lincoln Log Cabin Home was closed. I guess the Gov’s office forgot about that press release when they released this one today: http://www.illinois.gov/pressreleases/pressreleaseslistshow.cfm?recnum=7301
The public is invited to a traditional Christmas at the Lincoln Log Home on Friday, 12/5. Merry Christmas everyone…
- Secret Square - Monday, Dec 1, 08 @ 10:41 am:
SangamoGOP, I visited Lincoln Log Cabin (for the first and probably last time) this weekend, and the staff there said the Christmas event WILL go on as planned; after that, all further events are canceled.
- Secret Square - Monday, Dec 1, 08 @ 10:50 am:
Also, Phineas, many of these sites were ALREADY running mostly on volunteer labor because their staffs had been cut back severely in recent years. Many also “suggested” donations of about $2 or $3 a person or so. Simply making the suggested donation a mandatory admission fee would have helped.
Is the total money saved by ALL these closings really just $2 million? If that’s the case, just the $1 million that went by “mistake” to the Loop Lab School would make up half of that!
- Elliot Ness - Monday, Dec 1, 08 @ 10:51 am:
Jake,
You forgot to mention one source of revenue for the University of Illinois Athletic Department, Student Fees. So to say that tuition doesn’t help fund the athletic department is a little misleading as well.
- wordslinger - Monday, Dec 1, 08 @ 10:54 am:
I’m sick about the parks and historic sites. The money is nothing in the big picture. It’s a breach of faith with past generations.
Regarding the film tax credits, they became popular when productions were moving to Toronto and British Columbia to take advantage of the weaker Canadian dollar. That’s not an issue any longer.
- Cassandra - Monday, Dec 1, 08 @ 11:15 am:
Isn’t Obama meeting with our Blago and the other state governors soon to talk about state bailouts, what they will look like, and how much.
In view of this massive avalanche of cash that is almost certainly coming our way from the feds come
spring of 09, I think we can assume the parks and historic sites will be up and running by the time
spring rolls around. The DHS workers will get their money back. In the meantime, the flora and fauna get a rest break.
In addition to the opportunities for corruption associated with huge sums of federal money devolving to Illinois, I also fear that the Democrats will take advantage of the ending of the budget crisis to raise taxes. Other than those caveats, a massive influx of federal funds is a great idea–certainly as important as bailing out the financial markets.
- Cassandra - Monday, Dec 1, 08 @ 11:18 am:
Sorry, I mean, the DHS workers will get their jobs back.
Obama has specifically mentioned in his public statements that he does not want total layoffs in the country6 to be increased by a lot of public employee layoffs resulting from state and local budget crises.
- lincolnlover - Monday, Dec 1, 08 @ 11:21 am:
I have already called the Gov’s office in Chicago to tell him what I think of his idiotic closure of parks and sites. They make more money for their communities than the film tax credit makes for Cook County! This was nothing short of a vengeful political attack. The Pantagraph reports that the state gave out 4 million in grants to recycle programs. If there is $4million to give away, how about giving it back to where it belongs which is the parks and sites?
- Bill - Monday, Dec 1, 08 @ 11:51 am:
Priorities, people, priorities. Many of the same commenters that are now decrying the park closings are the ones who don’t want to raise revenues during the budget season. The worst is yet to come. The only way this state will ever be able to provide services that its citizens demand and deserve is to raise revenue (taxes).
- lincolnlover - Monday, Dec 1, 08 @ 12:12 pm:
Bill - I agree. We need to raise revenue. We could also call a two year morratorium on “member initiatives” - that would probably balance the budget without raising ANY new revenue! But, it will be a cold day in Hawaii before that happens!
- Captain Flume - Monday, Dec 1, 08 @ 2:26 pm:
Of course tax increases are the only way out of the cash flow/budget mess. The Governor has known that since day one and so has Madigan and so has Jones, but they have all tiptoed around the inevitable to the detriment of the people of the state. Some phony lines about political cover and wearing the jacket and all that crapola, and all for what? I cannot believe that the Governor’s policies, and attempted policies, have not been enabled by both legislative leaders, not just Sen. Jones, Jr. So instead of the taxpayers actually paying for services, we are paying for the debt. Thank you so much, all you merry gentlemen.
- Cassandra - Monday, Dec 1, 08 @ 5:32 pm:
No, tax increases are not the way out of the cash flow/budget mess–not the only way. If there is a substantial increase in federal revenues to Illinois, as part of a federal bailout, tax increases will not be needed during the current recession. If the monies are used wisely, that is, and not used to free up obligated monies which can they be shifted to pay to players and other ethically challenged individuals.
- jimbo - Monday, Dec 1, 08 @ 10:13 pm:
Gov’s daughter’s class was the last school class to tour the Dana Thomas House in Springfield before it closed. Shame other school kids won’t have the chance his daughter did.