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How 'movie tourism' hurts American cities

Taxpayer-subsidized film shoots are a drain on city finances. They also speed up gentrification

August 10, 2014 6:00AM ET

Over the past couple of years, a series of ads has appeared in New York City’s subways and buses touting the benefits that film productions bring to the five boroughs. “Each year, the film & TV production industry generates over $400 million in tax revenue to NYC” the cute, infographic-style posters read. The ads also inform readers that this is equivalent to the salaries of thousands of sanitation workers, firefighters or teachers. “Thank you for hosting production in your neighborhood,” they conclude. As though you had a choice.

The “Filming is good for NYC” campaign may assuage residents justifiably upset at losing parking spots or taking detours to avoid walking into a film set. But these ads also sugarcoat a series of corrupt city and state policies that use the “cultural value” of the entertainment industry to transfer taxpayer money to film production companies, encourage gentrification and increase inequality. 

Cultural institutions

Made in NY comes out of the Mayor’s Office of Film, Theatre and Broadcasting. It “celebrates” films and television programs that are produced in New York City by giving those productions a month of “free” (read: taxpayer funded) advertising in the subway, taxis and bus stops of New York City. In return, these productions donate either $10,000 or .1 percent of the production cost, whichever is greater. This amounts to much less than a month of free marketing in America’s number one media market. The productions must also and co-brand their advertisements with the “Made in NY” logo and messaging.

Wouldn’t the city better support its cultural institutions by just giving them the value of this advertising directly and letting the film companies advertise themselves? And wouldn’t it do better by the MTA just giving them this money outright?

Marketing these movie projects is just the tip of the iceberg. On top of free advertising, there are local business deals, city-subsidized production assistance — from free location scouting to liaising with unions and finding grants. Most crucially, there’s the New York State film subsidy. New York gives away $420 million in tax credits to film and television productions every year—so that even if the numbers claimed in the posters are true and that New York City gets “over $400 million” in tax revenue from filming, it’s at best an inefficient way for the state to fund the city via film company middlemen. (It’s worth noting that there’s no way to verify those numbers or determine how and where spending breaks down, because New York does not report how the state’s spending that money to the public.)

These tax credits are hardly unique to New York, and there’s plenty of reason to believe the state and city are losing money; other places certainly are. As David Sirota has argued, film subsidies are best understood as a way for Hollywood — in cahoots with state governments — to defraud taxpayers. Study after study after study show that film-subsidies are losing propositions, costing taxpayers millions. Film subsidies are often publicly “justified” by the jobs they produce. However, these jobs are often temporary —“Iron Man 3” hardly requires an iron smelting plant. They are also contingent on another state not offering a better subsidy.

New York City taxpayers last year footed the bill for 30 percent of the $100 million production cost of 'The Wolf of Wall Street' — a film about cronyism and corruption.

That means film workers cluster where productions are common — New York, LA, Vancouver, Louisiana — but are likely to leave (either temporarily or permanently) when another production, in an even lower-tax locale, begins. The subsidies don’t help the needy: Almost 50 percent of the subsidy money that goes toward wages goes to employees who already make over $1 million a year. This means states aren’t merely attracting “jobs,” but a specific class of jobs and workers. And Hollywood execs return the favor, giving generously to the politicians who support the policies. In New York, film and television companies gave almost $1 million to the Democratic Party between 2010 and 2013, in particular to governor Andrew Cuomo. Many of the donations arrived the day after the 2013 budget extending the tax credit passed. New York City taxpayers last year footed the bill for 30 percent of the $100 million production cost of “The Wolf of Wall Street” — a film about cronyism and corruption. Meanwhile, Massachusetts taxpayers bestowed $26.6 million in tax credits to major flop “RIPD” but gave only $17 million in tax credits to people living in low-income housing.

Movie tourism

Tax-credit defenders also argue that movies attract tourists. Although it’s impossible to guarantee a film’s success, let alone whether it’ll attract tourists to where it was shot, film-driven tourism is a reality: Consider all the “Lord of the Rings” fans who flock to New Zealand’s Shire, where the trilogy was filmed; the “Deliverance” devotees who have visited the Chatanooga river over the past 40 years; or the recent explosion of visits to Norway to see the sites filmed for “Frozen.” There is an entire industry of Destination Marketing Organizations that, among other things, help get particular locations screen time. Tourism, of course, is a major part of many big cities’ economies, but that hardly means that cash-strapped state governments should spend millions of taxpayer dollars on film-marketing strategies.

The result of such on-screen “imaging” of cities is that they become not only more desirable locations for tourism, but also for living. Movies and television make no small part of why so many want to move to New York or Los Angeles. Thus, both in terms of government budgets and residential make up, movies can indirectly contribute to urban inequality and gentrification.

Of course, movies have to be filmed somewhere. But increasingly, film has become entwined in state and city budgeting and policy, and deployed consciously by governments to shape public perceptions. By drawing film production companies into a state with concessions, employing higher-wage professionals, then bringing in tourists, subsidies are playing a role in ongoing urban gentrification: established professionals from elsewhere get the good jobs, while giving the financial equivalent of shitty service jobs to residents. It’s not that many of these professionals don’t deserve to be paid so well — production assistants and extras should just be paid much better than they are now — but it does mean film subsidies accelerate gentrification by bringing a wildly unequal industry into town at the expense of city workers and services.

Gentrified and unequal

The “Film is Good for New York” and “Made in NY” campaigns trade on the special cultural place of cinema, and the way in which New Yorkers might enjoy seeing their city in movies and television. But this film economy is good only for the New York it helps create: a gentrified, unequal, and tourist-friendly city. The poor are invisible, while the rich watch their glamorous lives reflected back to them on the silver screen.

The posters in the subway give the game away in their reference to firefighters and teachers. All this money that’s given away to film producers would be better spent directly employing city workers who might spend their time improving the city’s infrastructure or teaching kids, rather than blocking traffic and taking residents’ parking spots in the name of spectacle. But rather than investing in infrastructure and public works, local governments fund attractive images of their state in the movies. The posters have to argue that movies fund sanitation workers precisely because it’s evident that sanitation workers are better for New York than film production.

We tend to think of product placement as a brand name placed into a scene but independent from the narrative content of the film. But Hollywood films are, first and foremost, commodities: everything about them, from where the film is made to what the film is about, can be had for a price. And increasingly, that’s how local politicians think of their districts: commodities to be divvied up and sold to whomever is willing to pay.

Willie Osterweil is a writer and an editor at The New Inquiry and the frontman of the punk band Vulture Shit.

The views expressed in this article are the author's own and do not necessarily reflect Al Jazeera America's editorial policy.

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