A bread and circuses legislative session
Sony, the A’s, a lottery … what might end up being the signature items of the 2023 Nevada legislative session have nothing to do with problems that most need attention. (Photo: Richard Bednarski/Nevada Current)
Nevada has a lot of long-neglected needs that cry out for urgent policy responses. A movie studio isn’t one of them.
A legislative hearing is scheduled Tuesday on a bill to give nearly $200 million a year in tax credits for 20 years to Sony and another film production company to be named later.
Tax credits, of the sort proposed for the film industry (and the baseball thing, at least according to early reports, though that project seems more malleable and ethereal by the day), are transferable. That means a company can buy them from the recipient – gaming and insurance are specifically singled out in the Sony bill as industries eligible to buy/use the tax credits – and then use the credits to pay their tax bills.
Let’s say Sony puts a batch of tax credits on the market worth $50 million. The buyer wouldn’t pay $50 million for them. Transferable tax credits in states across the nation have often reportedly sold for about 75 cents on the dollar. At that price, MGM (which bought transferable tax credits from Tesla) could buy $50 million of tax credits from Sony for $37.5 million, effectively picking up a $12.5 million tax cut. The state, which otherwise would have received $50 million in tax revenue from MGM, would get nothing.
Ah, but proponents say the economic impact of the film industry would be, well, blockbuster. And the jobs, jobs, jobs.
About those jobs, and the quality thereof… before Nevada’s labor organizations lend full-throated support for yet another scheme to divert public revenue to private companies – as is their custom – they may want to at least confer with their sisters and brothers in the Writers Guild of America.
And in Georgia, home of the nation’s most notable film tax credit program, auditors have determined “The impact of the film tax credit on the state’s economy has been significantly overstated,” and now there are moves to rein in the program – a decision increasingly being made by other states as well.
But the prospective economic impact, no matter how overstated, isn’t the only political selling point of the Sony bill, and not even the primary one.
Sony, the A’s, a lottery … all of them are shiny objects that capture the public’s imagination.
The contention that any of them will eventually even if indirectly address long-neglected Nevada problems – Nevada’s perennial bottom-of-all-the-good-lists thing – is wishful trickle-down thinking. This explains why you have never heard anyone say “Gosh, Nevada’s mental health services and education and public transit and other public services and programs sure have improved since the Raiders came.”
And of course neither Sony, the A’s, nor a lottery (nope, not even the lottery, probably the most popular and worst idea of the three) will do anything to urgently and directly confront barriers that make life harder for working Nevadans than it has to be. For anyone to suggest otherwise would be asinine.
So what might end up being the signature items of the 2023 Nevada legislative session have nothing to do with problems that most need attention.
Unless of course you think distracting the populace with shiny objects is a pressing public policy priority. And a disturbing number of Nevada policymakers think exactly that.
A version of this column was originally published in the Daily Current newsletter, which is free, and which you can subscribe to here.
Our stories may be republished online or in print under Creative Commons license CC BY-NC-ND 4.0. We ask that you edit only for style or to shorten, provide proper attribution and link to our web site. Please see our republishing guidelines for use of photos and graphics.