Historical data for 2023 reveals a 15% decrease in direct film and television production spending in Georgia, reversing years of record growth. The decline totals approximately $3.7 billion, down from $4.4 billion in 2022, according to the Motion Picture Association of Georgia. Local businesses, including caterers and equipment rental companies, reported a 20% average drop in film-related revenue in 2023, states the Atlanta Business Chronicle.
Georgia's film tax incentive attracted billions in production spending, but its design and increasing global competition now drive productions overseas.
Given declining spending and a state review, Georgia will likely reform its film tax incentive or face a continued exodus of major productions, impacting its local economy.
How Georgia's Film Incentive Works
Georgia's film tax incentive offers a 30% transferable tax credit for productions spending over $500,000, as stated by the Georgia Department of Economic Development. The credit is fully transferable, allowing companies to sell unused credits to other Georgia taxpayers. Critics argue this reduces direct economic benefit, according to the Tax Policy Center. An independent economic analysis supports this, suggesting Georgia receives only $0.18 in net new tax revenue for every $1 in tax credit, according to the Georgia Public Policy Foundation. The low return implies Georgia effectively subsidizes a global industry without securing a proportional benefit for its public services.
Why Productions Choose Overseas Locations
A major studio recently shifted an upcoming blockbuster's production from Atlanta to the UK, citing more favorable exchange rates and local incentives, according to the Hollywood Reporter. Canada and the UK have significantly increased their film incentive packages, attracting more international productions, states the Film Industry Global Report. Industry insiders suggest a lack of skilled labor in specialized areas also contributes to productions looking elsewhere, according to Variety. Global competition, coupled with Georgia's transferable tax credit system, makes its film industry highly susceptible to a rapid exodus of productions, evidenced by the 2023 spending decrease.
Economic Impact on Georgia's Local Workforce
The number of film crew jobs in Georgia decreased by 8% in the first half of 2023, reports the Georgia Department of Labor. Concurrently, the Georgia Film Academy saw a 10% decline in new enrollments for its production programs in 2023, according to the Georgia Film Academy. While some smaller independent productions still choose Georgia due to existing infrastructure and diverse locations, reports IndieWire, the larger trend is concerning. The failure of legislative reform in 2022, despite growing evidence of the incentive's structural flaws and market volatility, suggests entrenched interests prioritize short-term gains over the long-term health and stability of Georgia's film industry.
What Reforms Are Georgia Policymakers Considering?
Governor Kemp's office initiated a review of the state's film tax incentive program, which concluded by Q3 2024, according to the Office of the Governor. The state legislature is considering proposals to cap the total amount of transferable tax credits issued annually, according to the Georgia State Legislature. A recent survey of film producers indicated that stability and predictability of incentives are as important as the size of the credit, reports PwC Entertainment Outlook. Georgia is at a critical juncture; policymakers exploring reforms could either stabilize the industry with predictable incentives or further deter productions if changes are perceived as unfavorable.
