Like Nero fiddling while Rome was burning, our state lawmakers are focusing on entertainment at the most inopportune time. With less than three weeks left of this year’s legislative session, only two bills have thus far made it to Governor Parson’s desk, yet policymakers are devoting time toward creating a new “entertainment” tax credit.
This new credit, called the Entertainment Industry Jobs Tax Credit, is just as bad—or perhaps even worse—as the film tax credit, which is truly horrible (as I explained here). The credit, based on a similar program in Pennsylvania, would reimburse a “qualified rehearsal facility” for rehearsal and touring expenses. If this sounds a bit vague, that might be intentional. As has been discussed previously (both here and here), this program is aimed entirely at one company in Chesterfield that has already received significant state and county subsidies.
Missouri already devotes more than $600 million per year to economic development tax credit programs that mostly don’t work, and this new entertainment tax credit is no better. Right now, despite efforts to bring the program to other states, Pennsylvania is the only place in the country that thinks the program is worthwhile. Unfortunately, even Pennsylvania’s own audit shows that the program is a bad investment.
According to a report from the state’s Independent Fiscal Office, the credit “provides substantial benefit to the only Pennsylvania qualified rehearsal facility.” And “the net return on investment (ROI) is 15 to 35 cents of state tax revenue for each tax credit dollar.” In other words, state taxpayers are losing 65 to 85 cents off each dollar to benefit a single private company.
This program is yet another example of Missouri’s legislature taking the wrong approach to getting the state’s economy back on track. If the legislature wants more concerts or live entertainment in the state, it should start by figuring out why there aren’t more already. And if the answer is the state’s taxes are too high, then lawmakers should consider lowering the tax burden for everyone as opposed to creating a specific carve-out for one private business.
A new tax credit isn’t going to make one Missouri city into the next Nashville. With so few days remaining in this year’s legislative session, and with so much left to do, it’s time for our lawmakers to stop fiddling around.
