In the 1930s Walt Disney got into a wrangle with California state government and announced he was planning to move his studios to Nevada. There was great excitement in the Silver State.
Then the Golden State reached an agreement and Nevadans were left holding the bag.
One of Myers’ Laws is this: Never assign human emotions to a corporation. Disney didn’t care about California, much less Nevada. He just wanted the best deal he could get and got it by playing the two states against each other.
On May 7, actor Nicolas Cage showed up in Carson City to testify before the Senate Finance Committee in favor of tax credits for filmmakers.
“I have four scripts right now that could be shot in the state of Nevada,” he said. Movie directors are “tired of filming in other states. They want to show something new.”
Nothing, of course, is keeping those directors from shooting in Nevada, if they are really so hungry for the state’s scenery. Nothing but a little corporate welfare. Nevadans have to pay them off to get their patronage.
The movie companies claim, based on a study by Ernst & Young, that the benefits of state tax incentives for movie companies include higher employment, more consumer spending and increased sales by suppliers, which seems like the minimum that should be expected.
But the study was paid for by the Motion Picture Association of America, so who knows whether it is sound. And even if it is, so what?
One risk of tax incentives is that they lead to more tax incentives. These corporations never get enough. Give them one subsidy and they’ll use it to get two from another state and then come back to Nevada for a match.
In Canada at one point, the incentives were so generous that after a studio made two movies, the third one could be made for free.
When he was president of the Screen Actors Guild, actor Richard Masur talked about how the U.S. had lost things like missile plants and was in danger of losing movie production. The absurdity of comparing strategic technology with entertainment seemed not to occur to Hollywood.
In Nevada, what’s particularly interesting about this situation is that Democratic legislators are beating the drums for it. The Nicolas Cage bill is sponsored by a Democratic senator. The Nevada Democratic Party sent out a mailing appealing for support for the movie corporations. The mailing featured a send-this-child-to-camp-style visual, a shot of Cage with his hand on one cheek, his head tilted, surrounded by a blue frame with the headline “Help Us Help Nic Cage/Sign The Petition.”
Someone in the legislative press room blew it up and posted it on the hallway window for passers-by to learn about the plight of the Hollywood studios.
It reminded me of when, in April 1998, Nevada Democratic Chairman Paul Henry attacked GOP efforts to eliminate tax deductibility of gambling losses.
The party of the people that once championed economic populism now panders for huge corporations and millionaires.
Former state legislator Sheila Leslie recently wrote about a Reno mental health program , Mobile Outreach Safety Team or MOST, that was nearly wiped out by budget cuts. It happened as Nevada’s decades-long reputation of indifference to the mentally ill got a boost from a Sacramento Bee exposé of Nevada patient dumping.
“The Legislature has choices to make,” Leslie wrote. “It can allocate $35 million a year in tax credits, for example, to Nicolas Cage’s filmmakers, a subsidy that hasn’t worked elsewhere, or it could invest that money to create MOST and other innovative mental health programs in Las Vegas. I think the choice is pretty clear.”
Dennis Myers is a veteran and Nevada journalist.