Florida Lawmakers Try To Stop Subsidizing Videogames; Send That Money To Hollywood Instead

from the we-NEED-to-throw-this-money-down-a-hole,-but-WHICH-ONE? dept

Wed, Feb 13th 2013 7:39am — Tim Cushing

Florida legislators are looking to dial back the tax credits they've been handing out to Electronic Arts over the past couple of years, citing concerns that "people sitting at computer terminals" just aren't bringing in enough taxable revenue.

"Can you tell me why video games need a tax incentive?" Sen. Eleanor Sobel, D-Hollywood, asked Department of Economic Opportunity Executive Director Jesse Panuccio at one point.

"I just don't see video games as an issue that's going to bring a lot of people to Florida and [bring] big expenditures," added state Sen. Gwen Margolis, D-Coconut Grove.

They may be right -- these tax incentives aren't paying off. After all, EA received $9.1 million during the 2011-12 fiscal year and is looking to score another $14.5 million to underwrite (full retail price!) roster updates for Madden NFL, NCAA Football and the latest iteration of Tiger Woods PGA Tour. EA, which has been in Central Florida since long before the subsidy train started rolling, defended its grab of state incentives by saying the money has "motivated the company to expand its Central Florida workforce during the last three years." That may be true about the last three years, but as is pointed out elsewhere in the article, EA employs fewer people today than it did in 2007.

Don't get me wrong. I don't think EA should be given tax breaks and other incentives in order to continue operating in Florida. In fact, I'm of the opinion that if a business needs subsidies to get by, it's probably not much of a business. However, they are a fact of life at this point, and giving businesses a tax break to move to your state is a powerful persuader. Many locales compete for the affections (and taxable revenue) of large companies, throwing larger and larger amounts money at them in hopes of a decent return on their investment.

If these legislators want to drop the subsidies, more power to them. Unfortunately, they don't want to get rid of subsidies. They just want to throw the money in another direction.

"To have such a concentration of it going to games — I mean, people sitting at computer terminals — I'm not sure most of us really think that's film," said state Sen. Jack Latvala, R-Clearwater. "Film is movies. … People have to hire a lot of folks and they have meals and have to stay in a hotel room."

"I think we ought to be focused on those kinds of things [rather] than games," he added.

"Do you consider any difference if a company is already situated in Florida and has a stable workforce, compared to a company that comes into the state and hires people that might not be hired otherwise, purchases food for the people they've hired, provides lodging for them?" [Sen. Geraldine] Thompson asked.

Oh, I see. You just want to take these extraneous fiscal crutches and offer them to a different member of the entertainment industry. This doesn't really change anything. Sure, legislators want to believe that a big Hollywood production will boost the local economy for the duration of the shooting, but prior experience shows that Hollywood-aimed subsidies rarely improve the financial situation of anyone other than the studio receiving them.

As was previously covered here, a study showed that nearly every subsidy program developed to attract motion picture studios to various locations has turned out to be a losing proposition. Most of the states studied recovered less than $0.25 on every tax dollar invested. Why? Because when a studio rolls into town to shoot a movie, it brings in a lot of its own talent. Sure, there are some temporary bumps to food and housing income, but when it's all said and done, the studios roll out of town slightly richer, leaving their hosts stuck with the bill.

Despite these losses, states continue to wave ever-increasing amounts of money in the air while shouting "Pick me!" at every passing entertainment concern, gambling away their constituents' tax dollars. Florida's legislators seem to be no different. They've mistaken movie studios for good-natured philanthropists and written off "people sitting at computer terminals" as a drain on the economy. It's a "spend money to make money" plan that has failed to pay off time and time again. All these legislators are arguing over is on which losing horse they should put their money.

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Filed Under: eleanor sobel, florida, jack latvala, movies, subsidies, video games
Companies: ea

33 Comments

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fogbugzd (profile), 13 Feb 2013 @ 6:26am

The movie industry has one thing going for it that no other industry can match. Politicians LOVE to rub elbows with movie stars. It is hard for most politicians to resist invitations to a few star-studded parties and promises of visits to local shots, premiers, and private showings. Toss in some campaign contributions and Hollywood can write any bill they want.
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Ninja (profile), 13 Feb 2013 @ 6:39am

To have such a concentration of it going to games � I mean, people sitting at computer terminals � I'm not sure most of us really think that's film

Oh the astonishing prejudice against computer basement dwellers. I do believe most of us geek are smart enough to do it awesomely right without any 'incentive' ;)

EA doesn't fit the category, they were taken over by greed over brilliant minds some time ago.
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SolkeshNaranek (profile), 13 Feb 2013 @ 7:46am

No feelings...
How can you be so callous towards Hollywood's need for subsidies?

Can you not think of the poor popcorn farmer that will suffer if Hollywood isn't allowed to suck up every dollar it can?
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Anonymous Coward, 13 Feb 2013 @ 7:58am

yes, just compare Hollywood and Detroit !!!. you can see the movie / entertainment industry is really failing, and I did not know movie instantly stop making money once they have been produced.

and that studios don't employ people, and they don't use the money they made off their last movie to help finance the production of their next movie.

Thanks masnick for clearing that up for us.
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Jeremy Lyman (profile), 13 Feb 2013 @ 7:59am

What now?
Oh, because a Terminal Sitter (aka an employed resident of your state) won't need to eat and sleep and interact with the local economy. I'm not arguing that EA should get tax incentives, but you'd think a long-term job creating enterprise would be preferable to a movie company renting out hotel rooms for a couple of months for folks who are going to export their pay back to where they really live.
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Anonymous Coward, 13 Feb 2013 @ 7:59am

Politicians are truly some of the most asshole disgusting people around.
They are so Corrupt !!!
Wake me up when the Revolution Beginm Please.
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Anonymous Coward, 13 Feb 2013 @ 7:59am

Have they ever just decided to stop all the tax breaks to coorporations to fix the US budget issues.

...and hell if there isn't a budget issue, why not lower taxes on Americans?
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Anonymous Coward, 13 Feb 2013 @ 8:03am

From the entertainment Industries.
If it wasn't for the piracy we wouldn't need the tax breaks. They are compensation for some of the lost income.
/sarc
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Akari Mizunashi (profile), 13 Feb 2013 @ 8:05am

So, this is the sequel to "Pay it Forward"?

I just saved myself $60.
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PaulT (profile), 13 Feb 2013 @ 8:06am

"I mean, people sitting at computer terminals � I'm not sure most of us really think that's film"

So, on top of everything else, he actually has no idea of how most modern movie special effects and editing are achieved (hint: computers)? Figures.
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PaulT (profile), 13 Feb 2013 @ 8:09am

Re:
Are you actually incapable of addressing the things people actually write rather than attacking the voices in your head? They do have pills for that nowadays, you know.
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Josh in CharlotteNC (profile), 13 Feb 2013 @ 8:28am

Re:
I did not know movie instantly stop making money once they have been produced.

Subsidies are supposed to benefit the state where the movie is produced, in terms of additonal tax revenue, jobs, etc.

So yes, once the company stops the production in Florida and moves back to Hollywood, it stops making money for Florida and disappears into the blackhole of Hollywood accounting.

If the subsidies do not return more to the state in tax revenue than the amount of the subsidy, then the state would be better off spending that money fixing potholes, paying teachers, or something else where the state gets more benefit from it. Heck, if the state is only getting back 25% of the subsidy, it would've been better off taking 50% of the proposed subsidy out as cash and just burning it in a big pile.
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Anonymous Coward, 13 Feb 2013 @ 8:30am

Translation: We need to stop subsidizing people who don't give us campaign contributions and start subsidizing people who do give me campaign contributions.
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quawonk, 13 Feb 2013 @ 8:30am

"people sitting at computer terminals as a drain on the economy"

Isn't that pretty much what these bankers do all day? The stock exchange is a bunch of computer terminals too.
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Josef Anvil (profile), 13 Feb 2013 @ 8:39am

Re:
Ok, now we need a "sad but true" button.
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snidely (profile), 13 Feb 2013 @ 8:46am

Constituency Says It All
"Can you tell me why video games need a tax incentive?" Sen. Eleanor Sobel, D-Hollywood, asked Department of Economic Opportunity Executive Director Jesse Panuccio at one point.

Well, she is the Senator from Hollywood.
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weneedhelp (profile), 13 Feb 2013 @ 8:47am

I'm not sure most of us really think that's film
It is better than movies. I dont go to the movies anymore. My wife and I will sit for hours playing Mario, and most recently Prince of Persia. Much more entertaining.
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Anonymous Coward, 13 Feb 2013 @ 8:48am

Re:
yeah but those computers are in another state generating tax revenue elsewhere. As long as I don't have to see those people sitting at computers in my backyard!
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Anonymous Coward, 13 Feb 2013 @ 8:53am

Re: Constituency Says It All
"Can you tell me why Hollywood needs a tax incentive?"

Fixed that for the Senator. Though I probably should be careful as I just opened the door for bullshit to come flying out...
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Anonymous Coward, 13 Feb 2013 @ 8:58am

Re: Constituency Says It All
That's probably Hollywood, Florida, given the setting of the story.
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Anonymous Coward, 13 Feb 2013 @ 9:26am

So he's complaining about people producing sitting at computers? Which is exactly what happens in film making also ....
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Anonymous Coward, 13 Feb 2013 @ 9:26am

Why alligators don't attack politicians?

Professional courtesy.
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Anonymous Coward, 13 Feb 2013 @ 9:29am

Re:
Are you sure that it is only elbows being rubbed?
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That One Guy (profile), 13 Feb 2013 @ 10:15am

Re: No feelings...
No worries, the popcorn farmers may have been hurting due to piracy, but the recent legal scene has more than turned that trend right around, and now the farmers are having trouble just keeping up with demand.
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Anonymous Coward, 13 Feb 2013 @ 10:27am

good thinking! i mean, Hollywood are so hard up! what with the 'Hollywood Accounting' and the government-given Tax Breaks, how the hell will they survive unless something else comes their way?
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Digitari, 13 Feb 2013 @ 10:39am

Re:
Does not the Illustrious Senator himself sit behind a desk??
Sans Computer of course, can't be getting things done and learning things now can we......
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Anonymous Coward, 13 Feb 2013 @ 10:58am

Re: Constituency Says It All
Which is a coastal town in South Florida but that does bring up the real reason she's probably taking this track: hotels are big business in that area.
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Anonymous Coward, 13 Feb 2013 @ 11:00am

Re: Re:
No, Senator's, even state senators, stand all day everyday. That way if a lobbyist wants to come by and feed them, clothe them, or give them gifts it counts as a luncheon.
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nasch (profile), 13 Feb 2013 @ 11:53am

Re: Re:
Heck, if the state is only getting back 25% of the subsidy, it would've been better off taking 50% of the proposed subsidy out as cash and just burning it in a big pile.

That really illustrates what a bad idea these subsidies are.
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Anonymous Coward, 13 Feb 2013 @ 12:16pm

Re: Re: Constituency Says It All
Don't they have a spiffy Thoroughbred racetrack nearby, too?
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fogbugzd (profile), 13 Feb 2013 @ 12:28pm

Re: Re:
Have you seen most politicians? Even movie stars have some standards left.
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Anonymous Coward, 13 Feb 2013 @ 2:16pm

Re:
Ea is the gaming industry's Masochistic Cthuloid entity. In the same way that Time Warner is the film industry's comparative.
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Anonymous Coward, 13 Feb 2013 @ 2:18pm

Re:
Pixar, Dreamworks and Disney would beg to differ.
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