“Now, [Celebrity] Sightings Are Anytime, Any Place”

In an email, a regular Show-Me Daily reader alerted me to a post on the Iowa-based Tax Update Blog. The post cites an article in the Des Moines Register identifying two reasons that people frequently cite in support of film tax credit programs: celebrity sightings and glamorous A-list parties. From the article, via the blog post (emphasis mine):

But some benefits can’t just be measured on a dollar-for-dollar basis. […] They expose non-Iowans to what the state has to offer. More intangible is the benefit of interactions in a state that can be cut off from the trends and centers of power. Not to mention the excitement factor. We’ve relied on caucuses every four years to bring action and celebrities to town. Now, sightings are anytime, any place.

I wonder: What is the economic multiplier for a celebrity sighting? (Or, for that matter, a Land Rover?) How much extra output does it yield for the state? Would the prospect of a celebrity sighting motivate more people to move to Missouri? If Missouri residents see Justin Bieber walking around the Central West End in Saint Louis, will it encourage them to purchase more goods and services than they would otherwise?

Additionally, I suspect that the majority of Iowa residents do not score invites for über-exclusive A-list parties that are held in the state. That’s unfortunate, since they’re the ones picking up the tab. (Talk about an egregious case of concentrated benefits and diffused costs! If such a party were held in Missouri, I suspect that the film industry wouldn’t let me in.)

It reminds me of a statement that Rep. Tim Flook made at a recent Tax Credit Review Commission meeting that I heard secondhand. His statement concisely demonstrates that, by subsidizing certain activities (in this case, celebrity sightings and A-list parties), the government crowds out private investment and economic activity elsewhere in the economy:

I watched (hi-tech companies) leave as George Clooney was shaking hands in STL

Also on the subject of state-provided film incentives, a different Show-Me Daily reader sent me a link to an article saying that Michigan is reconsidering scaling back its program. (Maybe their state government was inspired by ours in Missouri?) Not surprisingly, subsidizing celebrity sightings apparently hasn’t assuaged the economy in Michigan.