Supporters of Oklahoma’s film tax rebate have had a rough month. The rebate initially failed to pass out of the Oklahoma House of Representatives, then was revived on a second attempt. It still has to clear the Senate to remain in place.
Still, supporters of the Oklahoma tax credit should keep this in mind: Things could be worse. Just ask officials in Louisiana and Iowa.
Thanks in part to its tax credit, Louisiana saw the number of films shot in that state surge from one in 2002 to 118 in 2010. Yet in 2009, an official who formerly led efforts to lure those productions to Louisiana was sentenced to two years in federal prison. He had accepted bribes in exchange for providing credits to a film producer.
In another case, a former Baton Rouge producer was convicted of selling bogus tax credits. Two men recently pleaded guilty to submitting false expense claims to qualify for more than $1 million combined in tax credits. Another con man reaped nearly $1.9 million from multiple members of the New Orleans Saints organization by selling fake credits.
In 2011, the former manager of the Iowa Film Office was convicted of falsifying public records associated with one film project. That manager and several other film office employees were fired after one film-credit recipient used the taxpayer cash to purchase luxury vehicles. A 2010 state audit suggested $25.6 million in tax credits may have been improperly issued.
Oklahomans are fortunate that similar abuses haven’t been identified here. But these cases illustrate why it’s not enough for lawmakers to evaluate the film tax rebate based solely on its effectiveness in generating economic activity. They must also ensure the program has sufficient safeguards to prevent Oklahoma taxpayers from being fleeced by shysters.
That’s one storyline that doesn’t need an Oklahoma sequel.