Florida Entertainment Industry Financial Incentive Program Analysis
At the request of the Office of the Governor, the Florida Office of Economic and Demographic Research (EDR) performed an analysis of the impacts of the Florida film and entertainment industry financial incentive program on the Florida economy and on state government revenue collections. The analysis took place from May 2012 to October 2012. EDR employed two models to conduct the analysis: the REMI Tax-PI model and the statewide economic model written in GEMPACK. Section A of this report describes the REMI Tax-PI results and Section B describes the statewide economic model results. A comparison of the two results is contained on pages 20 and 21.
Page 1 Analysis - Film Tax Credit Program - Final
Florida Entertainment Industry Financial Incentive Program Analysis Section A – REMI Tax-PI Analysis Summary Analysis
This analysis performed by the Office of Economic and Demographic Research (EDR) is the first of two attempts to estimate the impacts of the Florida film and entertainment industry financial incentive program (section 288.1254, Florida Statutes) on the Florida economy and on state government revenue collections. The incentive program is intended to encourage the film and entertainment industry to locate productions in Florida. The incentive program was first funded as a reimbursement program in Fiscal Year 2004-05. Beginning in Fiscal Year 2010-11 the program became a tax credit program. Statute now provides a total of $296 million of film and entertainment tax credits (FTC) for Fiscal Year 2010-11 through Fiscal Year 2015-16 for certified film and entertainment industry productions making qualified expenditures.
This
analysis is limited to the impacts of the current $296 million tax credit program. A program as large as the FTC program will generate indirect and induced economic activity in addition to the direct activity attributable to the program.
From an economic perspective,
indirect activity represents the additional purchases by all local industries necessary to produce the output required from a change in final demand in a given industry. Since the working assumption of this paper is that the FTC program causes productions to locate in Florida, it follows that new support activity will also be required. Induced activity represents the response by all local industries caused by the expenditures of new household income generated by the direct and indirect activity of a change in final demand for a given industry. In the case of the FTC program, indirect activity would include restaurants and caterers purchasing additional food items to meet the needs of film crews. Induced activity would include such activity as the employees of the restaurants and caterers spending their wages in the community. For this analysis, the Office of Film and Entertainment (OFE) provided information for the estimated qualified expenditures by productions participating in the FTC program.
The
Revenue Estimating Conference (REC) provided estimates of when the tax credits would be redeemed by the productions. Total expenditures related to productions and the redemption of the tax credits are the direct impacts on the economy and state revenues. The production expenditures will generate additional expenditures in the economy through indirect and induced activity, thereby raising state output by more than the amount of the direct
Page 2 Analysis - Film Tax Credit Program - Final
Florida Entertainment Industry Financial Incentive Program Analysis production expenditures. Additional state government revenues would also be anticipated as a result of the additional economic activity. The tax credits, however, will have a mixed impact on the economy. The tax credits will lower the cost of production for the participating firms which allows additional expenditures and/or higher returns on private investment. On the other hand, because Florida has a balanced budget requirement, it is assumed that other state expenditures will be reduced to pay for the tax credits which will in turn reduce state output. Therefore, the tax credits will have both positive and negative impacts on economic activity. In this analysis, EDR used the REMI Tax-PI model (v1.3.202) to estimate the economic and state government impacts of the FTC program. The model is designed to estimate indirect and induced economic activity resulting from the direct impacts of the FTC program, as well as, the supply-side responses to the new activity (e.g., changes in investment and labor supply). The model also has the ability to estimate the impact of economic changes on state revenue collections and the corresponding changes in state expenditures to maintain a balanced budget. The model was run with a 15 year timeframe to capture any long term activity that may result from the FTC program. The results of the model show that the FTC program increases gross domestic product (GDP) at a rate of $15 for every $1 of tax incentive. This occurs mostly because the state tax incentive attracts capital from outside the state that is greater in total than the strict dollar amount of the tax incentive program.
Essentially, there is a leveraging effect associated with the state’s
investment. The FTC program also generates state revenues, however, it is only at a rate of $2 for every $5 of tax incentives. Therefore, the additional state revenues do not fully pay for the tax incentives. This occurs because much of the production activity is either not taxable under general law (for example, personal income) or specifically made exempt for the purposes of promoting film and entertainment productions (for example, specific sales tax exemptions). In addition, the film and entertainment industry is heavily labor intensive, and many of the assets are mobile and can be imported on a temporary basis from another state. The model projects an increase in economic activity for the duration of the tax incentive program. Once the incentives end, the economy returns to a normal level of activity by state Fiscal Year 2017-2018. There is no lasting economic impact because the incentive program is not large enough or long enough in duration to encourage the creation of infrastructure and a permanent presence. At this point, there appear to be insignificant ties or required Florida Page 3 Analysis - Film Tax Credit Program - Final
Florida Entertainment Industry Financial Incentive Program Analysis inputs to sustain a heightened level of activity beyond the subsidy period. This is largely due to the nature of the industry.
Note: The term “normal level of activity” refers to the baseline economic activity forecasted for the time period without the FTC program. The FTC program is then introduced to the forecast to estimate the change in economic activity for the same time period.
Page 4 Analysis - Film Tax Credit Program - Final
Florida Entertainment Industry Financial Incentive Program Analysis Background
Chapter 2003-81, Laws of Florida, created section 288.1254, Florida Statutes, which established the Florida entertainment industry financial incentive program. The purpose of this program as provided in statute “is to encourage the use of this state as a site for filming, for the digital production of films, and to develop and sustain the workforce and infrastructure for film, digital media, and entertainment production.”
The incentive program initially began as a
reimbursement program for qualified expenditures on entertainment industry productions. Chapter 2010-147, LOF, changed the program to a tax credit incentive (FTC) program. The Office of Film and Entertainment (OFE) in the Department of Economic Opportunity is charged with administering the program in coordination with the Department of Revenue. Subsequent legislation has increased the total tax credit amount to $296 million from Fiscal Year 2010-11 to Fiscal Year 2015-16. The tax credits may be used against sales and use tax or corporate income tax obligations or a combination of the two. The vast majority of credits have been taken as sales and use tax. The tax credits must be used within “5 years after the date the credit is awarded”. At least initially, the state must reduce appropriations or raise revenue collections by the $296 million cost of the tax credits in order to maintain a balanced budget. For the purposes of this analysis it is assumed that appropriations will be reduced to pay for the tax credits. Qualified productions are provided tax credits based upon a percentage of their qualified expenditures as specified in statute. The productions may also apply for and receive a sales tax exemption per section 288.1258, F.S. Both of these benefits are designed to encourage the film and entertainment industry to locate their productions in Florida. The OFE is responsible for administering the FTC program. Interested productions apply to the OFE for tax credits. The productions must provide information on the project, such as, the type of production, the estimated amount of qualified expenditures, the estimated number of individuals to be employed and the dates of the production. The OFE certifies the productions that meet the requirements and determines which fiscal year the credit will be provided. Once certified, the production may begin work and begin incurring qualified expenditures. After the production is completed, the production submits an audited report of qualified expenditures to the OFE for review. The OFE completes the review and approves the award of the tax credit.
Page 5 Analysis - Film Tax Credit Program - Final
Florida Entertainment Industry Financial Incentive Program Analysis This timeline means that the production activity takes place prior to the release of the state’s cash investment. The OFE has provided information on the estimated qualified expenditures of the certified productions. As of May 2012, the OFE had certified $262.3 million of the available $296 million of tax credits. For the purposes of this analysis the estimated qualified expenditures have been increased to consume the balance of the $296 million of tax credits. The Revenue Estimating Conference (REC) is responsible for determining the fiscal impacts of legislation affecting state revenues.
Each time legislation was passed affecting the FTC
program; the REC met and officially adopted the estimated fiscal impact of the legislation. The REC has provided estimates of when the FTCs will be redeemed. This information has been used to estimate when industries would receive the benefit of the credits and when state government appropriations would be reduced to account for the tax credits in order to maintain a balanced budget. The majority of the production expenditures are projected to occur in the first few years of the program. Because of the timeline previously described, redemption of the tax credits must lag behind this activity. In this analysis, EDR used the REMI Tax-PI model to estimate the economic and state government impacts of the FTC program. Tax-PI is modeling software produced by Regional Economic Models, Inc. (REMI) for evaluating the total fiscal and economic effects of tax policy changes. REMI Tax-PI is a dynamic fiscal and economic impact model which captures the direct, indirect and induced fiscal and economic effects of taxation and other policy changes over multiple years. EDR staff has modified the model to incorporate a Florida specific tax and budget structure to better estimate the impacts of fiscal policy changes. By conducting the analysis using a model with the capabilities of REMI Tax PI, estimates can be generated of the impacts of the FTC program on Florida’s economy and on state government revenues and expenditures.
It is important to note that the economic models provide
projections based upon large quantities of data and numerous mathematical computations. The projections are estimates and should not be considered to be exact impacts.
Page 6 Analysis - Film Tax Credit Program - Final
Florida Entertainment Industry Financial Incentive Program Analysis Assumptions NOTE: Florida state government operates on fiscal years (FY) of July 1 through June 30. They are referred to as either FY 2010-11 or FY2011, with the correct time period notated. Film Tax Credit – Section 288.1254(7)(a), F.S., provides the credits may be certified in the years as shown in the Table A-1.
After each legislative modification to the film tax credits, the
Revenue Estimating Conference provided revised estimates of the cash impact as shown in Table A-2. Table A-1 – Film Tax Credits by Fiscal Year as specified in Section 288.1254(7)(a), Florida Statutes (Fiscal Year Ending)
Film Tax Credits as specified in Statutes
FY2011
FY2012
FY2013
53,500,000
74,500,000
42,000,000
FY2014 42,000,000
FY2015
FY2016
42,000,000 42,000,000
TOTAL 296,000,000
Table A-2 – Film Tax Credit Impact by Fiscal Year as adopted by the Revenue Estimating Conference (Fiscal Year Ending)
REC Estimates Chap. 2010-147, LOF 5/5/2010 Chap. 2011-76, LOF 6/29/2011 Chap. 2012-32, LOF 3/13/2012 REC Tax Credit Estimated Impacts
FY2011
0
FY2012
FY2013
FY2014
53,500,000
74,500,000
38,000,000
4,000,000
4,000,000
53,500,000
78,500,000
42,000,000
FY2015
FY2016
38,000,000 38,000,000 4,000,000
TOTAL 242,000,000 12,000,000
42,000,000
42,000,000
42,000,000 80,000,000
296,000,000
It is assumed that industries will receive the benefit of the tax credit in the year adopted by the REC. It is assumed that industries will use the tax credit against a sales tax obligation because to date the vast majority of credits have been taken as sales tax. It is also assumed that state expenditures will be reduced by the amount of the adopted tax credit impact for each year to maintain a balanced state budget. This reduction is relative to state expenditures in the baseline that would have occurred in the absence of the credit’s existence. Production Expenditures – Total production expenditures are collectively assumed to be additional economic activity that would not have occurred if not for the tax credit incentive program.
Page 7 Analysis - Film Tax Credit Program - Final
Florida Entertainment Industry Financial Incentive Program Analysis The OFE provided information on the estimated qualified expenditures and certified tax credits for the productions which have been certified to begin work. The qualified expenditures were then used to estimate total expenditures. The total expenditures for each certified project are assumed to occur in the same state fiscal year as the project’s completion date. At the time of this analysis, the OFE had not yet certified productions sufficient to consume the entire amount of the FTCs. For the purposes of this analysis additional expenditures were added to the OFE data to consume the balance of the $296 million in FTCs. Table A-3 – OFE Certified Projects with Additional Expenditures (Fiscal Year Ending) FY2011 Adjusted Qualified and NonFixed 2005 $ (M) Qualified Expenditures
FY2012
353.1
870.6
FY2013 1,074.2
FY2014 811.9
FY2015 478.7
FY2016 180.9
TOTAL 3,769.4
It should be noted that the OFE has the authority to certify productions to begin prior to the year for which the production is allocated the credit. For all calculations and projections performed in this analysis, the film and entertainment industry is comprised of those industries that qualify for participation in the FTC program as specified in section 288.1254, F.S.
Page 8 Analysis - Film Tax Credit Program - Final
Florida Entertainment Industry Financial Incentive Program Analysis Results
Film and Entertainment Industry Contribution to the Florida Economy The REMI Tax-PI model estimates the film and entertainment industry’s direct, indirect and induced contribution to the state’s economy and to state revenue collections for the time period from FY2011-12 through FY2024-25 to be:
State gross domestic product (GDP) – from $2.26 billion to $3.56 billion annually
Employment all sectors – from 27,800 to 32,350 annually
State revenues all sources – from $72 million to $128 million annually
Film and Entertainment Industry Incentive Program Impact on the Florida Economy The REMI Tax-PI model projects that the impacts of the FTC program end once the program is over with the economy returning to a normal level of activity by state Fiscal Year 2017-18. Therefore, all reported results address the period from Fiscal Year 2010-11 to Fiscal Year 201718. The model estimates the FTC program’s direct, indirect and induced impacts on the state’s economy and on state government to be:
State gross domestic product (GDP) – Grows by $3.7 billion over the period which is a $15 increase for every $1 of tax credit. There is no permanent growth in GDP and GDP returns to normal level after the certified production expenditures end.
Employment all sectors – Total employment increases in response to the additional economic activity from the certified production expenditures. The additional jobs appear in the private sector and in Local Government. Additional private sector jobs reach a high of 11,891 in FY2013 at the height of the new activity. Once certified production expenditures end in FY2016, the next two fiscal years experience a temporary reduction of 600 and 900 jobs, respectively, below normal levels as the economy responds to the loss of activity. o
Local Government Employment – Local jobs increase because the model calculated increased collections in Ad Valorem taxes. Ad Valorem taxes are $103 million higher over the entire period. Page 9
Analysis - Film Tax Credit Program - Final
Florida Entertainment Industry Financial Incentive Program Analysis o
State Government Employment – State jobs decrease in the years when the state budget is reduced because of the tax incentives and gradually increase once the tax incentives end.
State revenues all sources – State revenues increase in FY2011 because of increased economic activity from the certified production expenditures, coupled with the REC expectation that no tax incentives will be used in that year. State revenues decrease in FY2012 through FY2016 as the tax incentives begin to be used.
Additional state
revenues are generated in every year because of the increased economic activity; however, the additional revenues are less than the amount of the deployed tax incentives. On net, state revenues are $178.9 million lower over the entire period. This result was achieved as additional collections from the new economic activity made up $117.1 million of the $296 million in tax credits or a $2 return for every $5 granted by the state in tax credits1. Table A-4 – REMI Model Impact Projections of the Film and Entertainment Tax Credit Program (Fiscal Year Ending) FY2011
FY2012
FY2013
FY2014
FY2015
FY2016
FY2017
FY2018
Total
Personal Income
Nominal $ (M)
201.0
436.0
576.5
492.5
320.0
138.5
35.5
8.5
2,208.5
Disposable Personal Income
Nominal $ (M)
180.5
388.0
510.0
434.5
284.0
125.5
35.0
11.5
1,969.0
Real Disposable Personal Income
Fixed 2005 $ (M)
174.5
384.0
488.0
389.0
255.0
127.0
29.5
(1.0)
1,846.0
Gross Domestic Product
Fixed 2005 $ (M)
431.5
914.0
1,136.5
850.0
447.5
105.5
(61.5)
(75.5)
3,748.0
Ratio - GDP : Film Credit
Fixed 2005 $ (M)
Output
Fixed 2005 $ (M)
713.5
1,505.5
1,869.5
1,397.5
733.5
169.0
(102.5)
(123.5)
6,162.5
Total Net State Revenues
Nominal $ (M)
9.3
(29.7)
(47.2)
(15.8)
(25.0)
(72.3)
1.7
(0.0)
15 : 1
Ratio - Net Revenues : Film Credit
(178.9) 2:5
Total Change in State Expenditures
Nominal $ (M)
9.3
(29.7)
(47.2)
(15.8)
(25.0)
(72.3)
1.7
Film Credits
Nominal $ (M)
0.0
53.5
78.5
42.0
42.0
80.0
Revenue from Program Activity
Nominal $ (M)
9.3
23.8
31.3
26.2
17.0
7.7
Total Employment
Jobs
4,972
10,258
12,531
9,292
4,879
871
(1,108)
(1,198)
(1,198)
12,531
Private Non-Farm Employment
Jobs
4,589
9,621
11,819
8,854
4,994
1,430
(620)
(897)
(897)
11,819
Government Employment
Jobs
381
637
712
437
(115)
(559)
(488)
(301)
(559)
712
State Government
Jobs
19
(110)
(201)
(254)
(517)
(712)
(503)
(292)
(712)
19
Local Government
Jobs
363
747
912
691
402
153
15
(9)
(13)
912
Population
Persons
1,004
2,744
4,722
5,752
5,898
5,440
4,673
3,945
1,004
5,898
Jobs per $million real GDP
Jobs
11.5
11.2
11.0
10.9
10.9
8.3
18.0
15.9
FY2011
FY2012
FY2013
FY2014
FY2015
FY2016
(0.0)
(178.9)
0.0
0.0
296.0
1.7
(0.0)
117.1
FY2017
FY2018 Minimum Maximum
Note: All figures reflect the change from the baseline.
See Appendices C and D to see the effects of making the current program permanent at the $42 million and $100 million levels, respectively. See Appendix E to see a side-by-side comparison of the three program levels.
1
This translates to a return on investment (ROI) of -60%. Page 10
Analysis - Film Tax Credit Program - Final
Florida Entertainment Industry Financial Incentive Program Analysis Section B – Statewide Economic Model Analysis Summary Analysis
This analysis performed by the Office of Economic and Demographic Research (EDR) is the second of two attempts to estimate the impacts of the Florida film and entertainment industry financial incentive program (section 288.1254, Florida Statutes) on the Florida economy and on state government revenue collections. The incentive program is intended to encourage the film and entertainment industry to locate productions in Florida. The incentive program was first funded as a reimbursement program in Fiscal Year 2004-05. Beginning in Fiscal Year 2010-11 the program became a tax credit program. Statute now provides a total of $296 million of film and entertainment tax credits (FTC) for Fiscal Year 2010-11 through Fiscal Year 2015-16 for certified film and entertainment industry productions making qualified expenditures.
This
analysis is limited to the impacts of the current $296 million tax credit program. A program as large as the FTC program will generate indirect and induced economic activity in addition to the direct activity attributable to the program.
From an economic perspective,
indirect activity represents the additional purchases by all local industries necessary to produce the output required from a change in final demand in a given industry.
Since the working
assumption of this paper is that the FTC program causes productions to locate in Florida, it follows that new support activity will also be required. Induced activity represents the response by all local industries caused by the expenditures of new household income generated by the direct and indirect activity of a change in final demand for a given industry. In the case of the FTC program, indirect activity would include restaurants and caterers purchasing additional food items to meet the needs of film crews. Induced activity would include such activity as the employees of the restaurants and caterers spending their wages in the community. For this analysis, the Office of Film and Entertainment (OFE) provided information for the estimated qualified expenditures by productions participating in the FTC program.
The
Revenue Estimating Conference (REC) provided estimates of when the tax credits would be redeemed by the productions. Total expenditures related to productions and the redemption of the tax credits are the direct impacts on the economy and state revenues. The production expenditures will generate additional expenditures in the economy through indirect and induced activity, thereby raising state output by more than the amount of the direct
Page 11 Analysis - Film Tax Credit Program - Final
Florida Entertainment Industry Financial Incentive Program Analysis production expenditures. Additional state government revenues would also be anticipated as a result of the additional economic activity. The tax credits, however, will have a mixed impact on the economy. The tax credits will lower the cost of production for the participating firms which allows additional expenditures and/or higher returns on private investment. On the other hand, because Florida has a balanced budget requirement, it is assumed that other state expenditures will be reduced to pay for the tax credits which will in turn reduce state output. Therefore, the tax credits will have both positive and negative impacts on economic activity. In this analysis, EDR used the statewide economic model written in GEMPACK to estimate the economic and state government impacts of the FTC program.
The model is designed to
estimate indirect and induced economic activity resulting from the direct impacts of the FTC program, as well as, the supply-side responses to the new activity (e.g., changes in investment and labor supply). The model also has the ability to estimate the impact of economic changes on state revenue collections and the corresponding changes in state expenditures to maintain a balanced budget. The results of the model show that the FTC program increases gross domestic product (GDP) at a rate of $16 for every $1 of tax incentive. This occurs mostly because the state tax incentive attracts capital from outside the state that is greater in total than the strict dollar amount of the tax incentive program.
Essentially, there is a leveraging effect associated with the state’s
investment. The FTC program also generates state revenues; however, it is only at a rate of $1 for every $2 of tax incentives. Therefore, the additional state revenues do not fully pay for the tax incentives. This occurs because much of the production activity is either not taxable under general law (for example, personal income) or specifically made exempt for the purposes of promoting film and entertainment productions (for example, specific sales tax exemptions). In addition, the film and entertainment industry is heavily labor intensive, and many of the assets are mobile and can be imported on a temporary basis from another state. The model projects an increase in economic activity for the duration of the tax incentive program. Once the incentives end, the economy returns to a more normal level of activity by state Fiscal Year 2017-2018.
There is no lasting economic impact because the incentive
program is not large enough or long enough in duration to encourage the creation of infrastructure and a permanent presence. At this point, there appear to be insignificant ties or
Page 12 Analysis - Film Tax Credit Program - Final
Florida Entertainment Industry Financial Incentive Program Analysis required Florida inputs to sustain a heightened level of activity beyond the subsidy period. This is largely due to the nature of the industry. Note: The term “normal level of activity” refers to the baseline economic activity forecasted for the time period without the FTC program. The FTC program is then introduced to the forecast to estimate the change in economic activity for the same time period.
Page 13 Analysis - Film Tax Credit Program - Final
Florida Entertainment Industry Financial Incentive Program Analysis Background
Chapter 2003-81, Laws of Florida, created section 288.1254, Florida Statutes, which established the Florida entertainment industry financial incentive program. The purpose of this program as provided in statute “is to encourage the use of this state as a site for filming, for the digital production of films, and to develop and sustain the workforce and infrastructure for film, digital media, and entertainment production.”
The incentive program initially began as a
reimbursement program for qualified expenditures on entertainment industry productions. Chapter 2010-147, LOF, changed the program to a tax credit incentive (FTC) program. The Office of Film and Entertainment (OFE) in the Department of Economic Opportunity is charged with administering the program in coordination with the Department of Revenue. Subsequent legislation has increased the total tax credit amount to $296 million from Fiscal Year 2010-11 to Fiscal Year 2015-16. The tax credits may be used against sales and use tax or corporate income tax obligations or a combination of the two. The vast majority of credits have been taken as sales and use tax. The tax credits must be used within “5 years after the date the credit is awarded”. At least initially, the state must reduce appropriations or raise revenue collections by the $296 million cost of the tax credits in order to maintain a balanced budget. For the purposes of this analysis it is assumed that appropriations will be reduced to pay for the tax credits. Qualified productions are provided tax credits based upon a percentage of their qualified expenditures as specified in statute. The productions may also apply for and receive a sales tax exemption per section 288.1258, F.S. Both of these benefits are designed to encourage the film and entertainment industry to locate their productions in Florida. The OFE is responsible for administering the FTC program. Interested productions apply to the OFE for tax credits. The productions must provide information on the project, such as, the type of production, the estimated amount of qualified expenditures, the estimated number of individuals to be employed and the dates of the production. The OFE certifies the productions that meet the requirements and determines which fiscal year the credit will be provided. Once certified, the production may begin work and begin incurring qualified expenditures. After the production is completed, the production submits an audited report of qualified expenditures to the OFE for review. The OFE completes the review and approves the award of the tax credit.
Page 14 Analysis - Film Tax Credit Program - Final
Florida Entertainment Industry Financial Incentive Program Analysis This timeline means that the production activity takes place prior to the release of the state’s cash investment. The OFE has provided information on the estimated qualified expenditures of the certified productions. As of May 2012, the OFE had certified $262.3 million of the available $296 million of tax credits. For the purposes of this analysis the estimated qualified expenditures have been increased to consume the balance of the $296 million of tax credits. The Revenue Estimating Conference (REC) is responsible for determining the fiscal impacts of legislation affecting state revenues.
Each time legislation was passed affecting the FTC
program; the REC met and officially adopted the estimated fiscal impact of the legislation. The REC has provided estimates of when the FTCs will be redeemed. This information has been used to estimate when industries would receive the benefit of the credits and when state government appropriations would be reduced to account for the tax credits in order to maintain a balanced budget. The majority of the production expenditures are projected to occur in the first few years of the program. Because of the timeline previously described, redemption of the tax credits must lag behind this activity. In this analysis, EDR used the statewide economic model to estimate the economic and state government impacts of the FTC program. The statewide economic model was developed using GEMPACK software with the assistance of the Centre of Policy Studies (CoPS) at Monash University. The statewide model was designed to evaluate the total fiscal and economic effects of tax policy changes. The statewide model is a dynamic computable general equilibrium model which captures the direct, indirect and induced fiscal and economic effects of taxation and other policy changes over multiple years.
EDR and CoPS staff have designed the model to
incorporate a Florida specific tax and budget structure to better estimate the impacts of proposed fiscal policy changes by state fiscal year. By conducting the analysis using the statewide economic model, estimates can be generated of the impacts of the FTC program on Florida’s economy and on state government revenues and expenditures. It is important to note that the economic models provide projections based upon large quantities of data and numerous mathematical computations. estimates and should not be considered to be exact impacts.
Page 15 Analysis - Film Tax Credit Program - Final
The projections are
Florida Entertainment Industry Financial Incentive Program Analysis Assumptions NOTE: Florida state government operates on fiscal years (FY) of July 1 through June 30. They are referred to as either FY 2010-11 or FY2011, with the correct time period notated. Film Tax Credit – Section 288.1254(7)(a), F.S., provides the credits may be certified in the years as shown in the Table B-1.
After each legislative modification to the film tax credits, the
Revenue Estimating Conference provided revised estimates of the cash impact as shown in Table B-2. Table B-1 – Film Tax Credits by Fiscal Year as specified in Section 288.1254(7)(a), Florida Statutes (Fiscal Year Ending)
Film Tax Credits as specified in Statutes
FY2011
FY2012
FY2013
53,500,000
74,500,000
42,000,000
FY2014 42,000,000
FY2015
FY2016
42,000,000 42,000,000
TOTAL 296,000,000
Table B-2 – Film Tax Credit Impact by Fiscal Year as adopted by the Revenue Estimating Conference (Fiscal Year Ending)
REC Estimates Chap. 2010-147, LOF 5/5/2010 Chap. 2011-76, LOF 6/29/2011 Chap. 2012-32, LOF 3/13/2012 REC Tax Credit Estimated Impacts
FY2011
0
FY2012
FY2013
FY2014
53,500,000
74,500,000
38,000,000
4,000,000
4,000,000
53,500,000
78,500,000
42,000,000
FY2015
FY2016
38,000,000 38,000,000 4,000,000
TOTAL 242,000,000 12,000,000
42,000,000
42,000,000
42,000,000 80,000,000
296,000,000
It is assumed that industries will receive the benefit of the tax credit in the year adopted by the REC. It is assumed that industries will use the tax credit against a sales tax obligation because to date the vast majority of credits have been taken as sales tax. It is also assumed that state expenditures will be reduced by the amount of the adopted tax credit impact for each year to maintain a balanced state budget. This reduction is relative to state expenditures in the baseline that would have occurred in the absence of the credit’s existence. Production Expenditures – Total production expenditures are collectively assumed to be additional economic activity that would not have occurred if not for the tax credit incentive program.
Page 16 Analysis - Film Tax Credit Program - Final
Florida Entertainment Industry Financial Incentive Program Analysis The OFE provided information on the estimated qualified expenditures and certified tax credits for the productions which have been certified to begin work. The qualified expenditures were then used to estimate total expenditures. The total expenditures for each certified project are assumed to occur in the same state fiscal year as the project’s completion date. At the time of this analysis, the OFE had not yet certified productions sufficient to consume the entire amount of the FTCs. For the purposes of this analysis additional expenditures were added to the OFE data to consume the balance of the $296 million in FTCs. Table B-3 – OFE Certified Projects with Additional Expenditures (Fiscal Year Ending) FY2011 Adjusted Qualified and NonFixed 2005 $ (M) Qualified Expenditures
FY2012
353.1
870.6
FY2013 1,074.2
FY2014 811.9
FY2015 478.7
FY2016 180.9
TOTAL 3,769.4
It should be noted that the OFE has the authority to certify productions to begin prior to the year for which the production is allocated the credit. For all calculations and projections performed in this analysis, the film and entertainment industry is comprised of those industries that qualify for participation in the FTC program as specified in section 288.1254, F.S.
Page 17 Analysis - Film Tax Credit Program - Final
Florida Entertainment Industry Financial Incentive Program Analysis Results
Film and Entertainment Industry Incentive Program Impact on the Florida Economy The statewide economic model projects that the impacts of the FTC program rapidly end once the program is over with the economy moving to a more normal level of activity by state Fiscal Year 2017-18. Therefore, all reported results address the period from Fiscal Year 2010-11 to Fiscal Year 2017-18. The model estimates the FTC program’s direct, indirect and induced impacts on the state’s economy and on state government to be:
State gross domestic product (GDP) – Grows by $4.1 billion over the period which is a $16 increase for every $1 of tax credit. There is no permanent growth in GDP and GDP returns to normal level after the certified production expenditures end.
Employment all sectors – Total employment increases in response to the additional economic activity from the certified production expenditures. The additional jobs appear in the private sector and in Local Government. Additional private sector jobs reach a high of 7,523 in FY2013 at the height of the new activity. Once certified production expenditures begin to decline in FY2015 and the tax incentives are redeemed through FY2016, there is a temporary reduction of jobs below normal levels as the economy responds to the loss of activity. o
Local Government Employment – Local jobs increase because the model calculated increased collections in Ad Valorem taxes.
o
State Government Employment – State jobs decrease in the years when the state budget is reduced because of the tax incentives and gradually increase once the tax incentives end.
State revenues all sources – State revenues increase in FY2011 because of increased economic activity from the certified production expenditures, coupled with the REC expectation that no tax incentives will be used in that year. State revenues decrease in FY2012 through FY2018 as the tax incentives begin to be used.
Additional state
revenues are generated through FY2016 because of the increased economic activity; however, the additional revenues are less than the amount of the deployed tax Page 18 Analysis - Film Tax Credit Program - Final
Florida Entertainment Industry Financial Incentive Program Analysis incentives. On net, state revenues are $161.9 million lower over the entire period. This result was achieved as additional collections from the new economic activity made up $134.1 million of the $296 million in tax credits or a $1 return for every $2 granted by the state in tax credits2. Table B-4 – Statewide Economic Model Impact Projections of the Film and Entertainment Tax Credit Program (Fiscal Year Ending) FY2011
FY2012
FY2013
FY2014
FY2015
FY2016
FY2017
FY2018
Total
Personal Income
Nominal $ (M)
293.3
629.6
778.0
582.4
334.8
110.0
(22.7)
(34.4)
2,671.0
Disposable Personal Income
Nominal $ (M)
250.9
538.3
663.4
494.0
282.1
91.1
(20.9)
(29.3)
2,269.6
Real Disposable Personal Income
Fixed 2005 $ (M)
230.3
493.7
608.1
452.5
258.3
83.4
(19.1)
(26.9)
2,080.3
Real Gross Domestic Product
Fixed 2005 $ (M)
508.0
1,062.9
1,275.7
906.7
468.0
91.9
(91.7)
(72.2)
4,149.3
Ratio - GDP : Film Credit
Fixed 2005 $ (M)
Real Output
Fixed 2005 $ (M)
866.5
1,813.0
2,155.3
1,493.0
734.1
99.5
(197.7)
(142.2)
6,821.5
Total Net State Revenues
Nominal $ (M)
18.3
(15.5)
(34.4)
(13.2)
(29.3)
(79.9)
(5.1)
(2.8)
Ratio - Net Revenues : Film Credit
Fixed 2005 $ (M)
Total Change in State Expenditures
Nominal $ (M)
18.3
(15.5)
(34.4)
(13.2)
(29.3)
(79.9)
(5.1)
(2.8)
(161.9)
Film Credits
Nominal $ (M)
0.0
53.5
78.5
42.0
42.0
80.0
0.0
0.0
296.0
Revenue from Program Activity
Nominal $ (M)
(2.8)
134.1
16 : 1
(161.9) 1:2
18.3 FY2011
38.0 FY2012
44.1 FY2013
28.8 FY2014
12.7 FY2015
0.1 FY2016
(5.1) FY2017
FY2018 Minimum Maximum
Total Employment
Jobs
3,385
7,510
7,234
2,646
(887)
(2,775)
(2,756)
(1,238)
(2,775)
7,510
Private Non-Farm Employment
Jobs
3,259
7,462
7,523
3,307
80
(1,722)
(2,101)
(1,010)
(2,101)
7,523
State and Local Government Employment
Jobs
127
58
(259)
(610)
(914)
(1,009)
(625)
(214)
(1,009)
127
State Government
Jobs
49
(141)
(530)
(859)
(1,109)
(1,144)
(725)
(303)
(1,144)
49
Local Government
Jobs
78
199
271
249
195
135
100
89
78
271
Population
Persons
75
553
1,745
3,173
4,156
4,618
4,627
4,354
75
4,627
Jobs per $million real GDP
Jobs
6.7
7.1
5.7
2.9
(1.9)
(30.2)
30.1
17.1
Note: All figures reflect the change from the baseline.
2
This translates to a return on investment (ROI) of -50%. Page 19
Analysis - Film Tax Credit Program - Final
Florida Entertainment Industry Financial Incentive Program Analysis Comparison of the Statewide Economic Model and the REMI Tax-PI Model Results of the Film and Entertainment Industry Incentive Program Impact on the Florida Economy The statewide economic model and REMI Tax-PI model results are very similar.
For all
measures except employment and population the statewide economic model projects that the impacts of the FTC program rise and fall more steeply than REMI Tax-PI. Essentially the statewide model appears to be more responsive to the changes in funding associated with the FTC program. The statewide model projects population growth to be lower and to have a more gradual rise and decline than the REMI Tax-PI model. Also, the statewide model projects a smaller increase in employment than the REMI Tax-PI model and a steeper decline.
The differences in
population growth are because the statewide model projects a slower and more conservative response by workers from outside of the state to changes in employment opportunities provided by the program.
The differences in employment are due, in part, to the statewide model
estimating more movement of workers from other industries within the state to the film industry in response to the higher demand and higher wages resulting from the increased number of film projects. The movement of workers between industries in Florida raises employment in the film industry but mutes the increase in the number of jobs statewide.
Page 20 Analysis - Film Tax Credit Program - Final
Florida Entertainment Industry Financial Incentive Program Analysis It should be noted that although the statewide model has a “Ratio – Net Revenues : Film Credit” of 1:2 as compared to the 2:5 ratio from the REMI Tax-PI model, only 6.3 percentage points separates the two ratios in fixed dollars: Statewide Model: 46.3% REMI Tax-PI:
40.0%
Table B-5 – Comparison of the Statewide Economic Model and REMI Tax-PI Model Projections of the Film and Entertainment Tax Credit Program (Fiscal Year Ending) FY2011 Personal Income
Nominal $ (M)
Disposable Personal Income
Nominal $ (M)
Real Disposable Personal Income
Real Gross Domestic Product
Ratio - GDP : Film Credit
Fixed 2005 $ (M)
Fixed 2005 $ (M)
Fixed 2005 $ (M)
FY2012
FY2013
FY2014
FY2015
FY2016
FY2017
FY2018
201.0
436.0
576.5
492.5
320.0
138.5
35.5
8.5
2,208.5
Statewide Model
293.3
629.6
778.0
582.4
334.8
110.0
(22.7)
(34.4)
2,671.0
REMI Tax-PI Model
180.5
388.0
510.0
434.5
284.0
125.5
35.0
11.5
1,969.0
Statewide Model
250.9
538.3
663.4
494.0
282.1
91.1
(20.9)
(29.3)
2,269.6
REMI Tax-PI Model
174.5
384.0
488.0
389.0
255.0
127.0
29.5
(1.0)
1,846.0
Statewide Model
230.3
493.7
608.1
452.5
258.3
83.4
(19.1)
(26.9)
2,080.3
REMI Tax-PI Model
431.5
914.0
1,136.5
850.0
447.5
105.5
(61.5)
(75.5)
3,748.0
Statewide Model
508.0
1,062.9
1,275.7
906.7
468.0
91.9
(91.7)
(72.2)
4,149.3
REMI Tax-PI Model
15 : 1
Statewide Model Real Output
Fixed 2005 $ (M)
Total Net State Revenues
Nominal $ (M)
Fixed 2005 $ (M)
16 : 1
REMI Tax-PI Model
713.5
1,505.5
1,869.5
1,397.5
733.5
169.0
(102.5)
(123.5)
6,162.5
Statewide Model
866.5
1,813.0
2,155.3
1,493.0
734.1
99.5
(197.7)
(142.2)
6,821.5
9.3
(29.7)
(47.2)
(15.8)
(25.0)
(72.3)
1.7
(0.0)
(178.9)
18.3
(15.5)
(34.4)
(13.2)
(29.3)
(79.9)
(5.1)
(2.8)
REMI Tax-PI Model Statewide Model
Ratio - Net Revenues : Film Credit
Population
Jobs
Persons
2:5
Statewide Model
1:2 FY2012
FY2013
FY2014
FY2015
FY2016
FY2017
FY2018 Minimum Maximum
REMI Tax-PI Model
4,972
10,258
12,531
9,292
4,879
871
(1,108)
(1,198)
(1,198)
12,531
Statewide Model
3,385
7,510
7,234
2,646
(887)
(2,775)
(2,756)
(1,238)
(2,775)
7,510
REMI Tax-PI Model
1,004
2,744
4,722
5,752
5,898
5,440
4,673
3,945
1,004
5,898
75
553
1,745
3,173
4,156
4,618
4,627
4,354
75
4,627
Statewide Model
Note: All figures reflect the change from the baseline.
Page 21 Analysis - Film Tax Credit Program - Final
(161.9)
REMI Tax-PI Model
FY2011 Total Employment
Total
REMI Tax-PI Model
Florida Entertainment Industry Financial Incentive Program Analysis Appendix A - Tourism and Product Placement
Although there is a stated belief among film and tourism professionals and some economists that there is economic value in the exposure states receive through film and other productions; to date the evidence has been anecdotal and no economic models exist that can reliably estimate such impacts. The exposure is usually associated with one of two possible outcomes: (1) increased advertising value leading generally to a downstream increase in tourism, or (2) an increase in tourism as a direct result of viewing. Hudson and Ritchie (2006) compiled a list of productions illustrating film induced tourism (see the table below).
Page 22 Analysis - Film Tax Credit Program - Final
Florida Entertainment Industry Financial Incentive Program Analysis Hudson and Ritchie (2006) concluded that “film tourism is a complex and dynamic concept, and success depends on a number of factors outside the control of a destination”. It should be noted that all of the productions in this list were commercial and/or critical successes. One example of what appears to be film induced tourism in Florida is the increase in tourism in the Tampa Bay area after the release of the film “Dolphin Tale” in September 2011. The Clearwater Marine Aquarium reports attendance has increase four-fold and 100 jobs have been added since the release of the film. The Clearwater Beach Chamber of Commerce credits the increased area tourism to the film and to increased marketing, good weather, pent-up demand and improved consumer confidence.
It would be difficult to determine how much of the
increased tourism is due to any one factor. Having high profile films and television programs prominently feature Florida might be considered equivalent to advertising. To gauge what this exposure would cost if purchased, Ron Sachs Communications was contacted for examples of advertising prices. According to Ron Sachs Communications the cost of advertising is generally determined by the number of potential viewers. A 30 second commercial during a popular primetime show costs $150,000 or more. A 30 second commercial during the Super Bowl costs upwards of $3.5 million because of the worldwide audience. Likewise, the value of a film’s portrayal of Florida would depend upon the size of the audience, the prominence of the Florida scenes and the favorable portrayal of Florida. In addition, an estimate would need to be made of the likelihood that viewers would be prompted to visit Florida as a result of viewing the production. Although the film industry is assumed to have a positive impact on tourism to filming locations, a review of the literature indicates that there are no reliable models for estimating the degree of the positive impact. To account in some way for the positive impact due to tourism, the models have been allowed to calculate sales tax on expenditures for production which have received sales tax exemptions --- essentially making the two impacts offsetting.
Page 23 Analysis - Film Tax Credit Program - Final
Florida Entertainment Industry Financial Incentive Program Analysis Appendix B - Glossary Balanced Budget – Article VII, Section 1(d), Florida Constitution, requires that sufficient revenue be raised to defray the expenses of the state for each fiscal period. Disposable Personal Income* – The total income that can be used by the household sector for either consumption or saving during a given period of time, usually one year. This is the income left over after income taxes and social security taxes are removed and government transfer payments, like welfare, social security benefits, or unemployment compensation are added. Gross Domestic Product* (GDP) – The total market value of all goods and services produced within the political boundaries of an economy during a given period of time, usually one year. Indirect Activity – Additional purchases by all local industries necessary to produce the output required from a change in final demand in a given industry. Induced Activity – Response by all local industries caused by the expenditures of new household income generated by the direct and indirect activity of a change in final demand for a given industry.
* Definitions from http://glossary.econguru.com/
Page 24 Analysis - Film Tax Credit Program - Final
Florida Entertainment Industry Financial Incentive Program Analysis Appendix C – Permanent Program at the $42 Million Level REMI Model Impact Projections of the Film and Entertainment Tax Credit Program (Fiscal Year Ending) FY2011
FY2012
FY2013
FY2014
FY2015
FY2016
FY2017
FY2018
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
Total 2018 Total All
Personal Income
Nominal $ (M)
201.0
436.0
576.5
492.5
350.0
275.0
266.0
265.5
260.0
254.5
251.0
250.5
252.5
256.0
260.0
2,862.5
4,647.0
Disposable Personal Income
Nominal $ (M)
180.5
388.0
510.0
434.5
310.0
244.0
235.5
235.0
230.5
225.5
222.5
222.5
224.5
227.5
231.0
2,537.5
4,121.5
Real Disposable Personal Income
Fixed 2005 $ (M)
174.5
384.0
488.0
389.0
276.5
233.0
217.0
206.5
202.0
197.0
193.0
189.0
186.0
183.5
181.0
2,368.5
3,700.0
Gross Domestic Product
Fixed 2005 $ (M)
431.5
914.0
1,136.5
850.0
510.5
370.5
353.5
346.0
337.0
328.0
320.0
314.0
308.0
303.5
299.0
4,912.5
7,122.0
Ratio - GDP : Film Credit
Fixed 2005 $ (M)
Output
Fixed 2005 $ (M)
Total Net State Revenues
Nominal $ (M)
17 : 1 713.5
1,505.5
1,869.5
1,397.5
836.0
600.5
571.5
558.5
541.0
525.0
512.0
502.5
493.5
486.0
479.0
9.3
(29.7)
(47.2)
(15.8)
(23.4)
(65.1)
(27.9)
(28.2)
(28.5)
(28.8)
(28.9)
(28.9)
(28.8)
(28.7)
(28.5)
Ratio - Net Revenues : Film Credit
8,052.5
14 : 1 11,591.5
(227.9)
(429.1)
2:5
2:5
Total Change in State Expenditures
Nominal $ (M)
9.3
(29.7)
(47.2)
(15.8)
(23.4)
(65.1)
(27.9)
(28.2)
(28.5)
(28.8)
(28.9)
(28.9)
(28.8)
(28.7)
(28.5)
(227.9)
(429.1)
Film Credits
Nominal $ (M)
0.0
53.5
78.5
42.0
42.0
80.0
42.0
42.0
42.0
42.0
42.0
42.0
42.0
42.0
42.0
338.0
674.0
Revenue from Program Activity
Nominal $ (M)
13.5
152.1
244.9
9.3 FY2011
23.8 FY2012
31.3 FY2013
26.2 FY2014
18.6 FY2015
14.9 FY2016
14.1 FY2017
13.8 FY2018
13.5 FY2019
13.2 FY2020
13.1 FY2021
13.1 FY2022
13.2 FY2023
13.3 FY2024
FY2025 Minimum Maximum
Total Employment
Jobs
4,972
10,258
12,531
9,292
5,436
3,634
3,394
3,295
3,134
2,994
2,886
2,806
2,732
2,671
2,612
2,612
12,531
Private Non-Farm Employment
Jobs
4,589
9,621
11,819
8,854
5,480
3,986
3,675
3,472
3,302
3,158
3,047
2,960
2,882
2,813
2,747
2,747
11,819
Government Employment
Jobs
381
637
712
437
(45)
(351)
(282)
(178)
(169)
(165)
(160)
(154)
(149)
(142)
(136)
(351)
712
State Government
Jobs
19
(110)
(201)
(254)
(493)
(704)
(618)
(504)
(485)
(471)
(457)
(443)
(430)
(417)
(405)
(704)
19
Local Government
Jobs
363
747
912
691
449
353
336
326
316
306
297
289
281
275
269
269
912
Population
Persons
1,004
2,744
4,722
5,752
5,995
5,983
5,904
5,787
5,666
5,546
5,426
5,308
5,195
5,089
4,989
1,004
5,995
Jobs per $million real GDP
Jobs
11.5
11.2
11.0
10.9
10.6
9.8
9.6
9.5
9.3
9.1
9.0
8.9
8.9
8.8
8.7
Note: All figures reflect the change from the baseline.
Page 25 Analysis - Film Tax Credit Program - Final
Florida Entertainment Industry Financial Incentive Program Analysis Appendix D – Permanent Program at the $100 Million Level REMI Model Impact Projections of the Film and Entertainment Tax Credit Program (Fiscal Year Ending) FY2011
FY2012
FY2013
FY2014
FY2015
FY2016
FY2017
FY2018
FY2019
FY2020
FY2021
FY2022
FY2023
FY2024
FY2025
Total 2018 Total All
Personal Income
Nominal $ (M)
201.0
436.0
576.5
588.0
605.0
607.0
617.0
635.5
654.5
659.0
651.0
643.5
638.5
636.0
634.5
4,266.0
8,783.0
Disposable Personal Income
Nominal $ (M)
180.5
388.0
510.0
518.0
532.5
534.0
543.0
559.0
575.5
579.5
573.5
568.0
564.0
562.5
562.0
3,765.0
7,750.0
Real Disposable Personal Income
Fixed 2005 $ (M)
174.5
384.0
488.0
458.0
454.5
470.0
487.5
495.0
497.5
491.0
477.0
463.0
450.5
439.5
429.0
3,411.5
6,659.0
Gross Domestic Product
Fixed 2005 $ (M)
431.5
914.0
1,136.5
1,043.5
993.5
951.0
932.0
922.5
923.0
909.0
874.0
841.5
812.5
786.5
762.5
7,324.5
13,233.5
Ratio - GDP : Film Credit
Fixed 2005 $ (M)
22 : 1
15 : 1
Output
Fixed 2005 $ (M)
713.5
1,505.5
1,869.5
1,715.5
1,630.0
1,552.0
1,512.5
1,490.0
1,484.0
1,458.0
1,402.0
1,350.0
1,303.5
1,262.0
1,223.5
11,988.5
21,471.5
Total Net State Revenues
Nominal $ (M)
9.3
(29.7)
(47.2)
(10.9)
(10.4)
(48.0)
(67.3)
(66.5)
(65.8)
(65.6)
(66.0)
(66.4)
(66.6)
(66.8)
(66.8)
Ratio - Net Revenues : Film Credit
(270.5)
(734.5)
3:5
2:5
Total Change in State Expenditures
Nominal $ (M)
9.3
(29.7)
(47.2)
(10.9)
(10.4)
(48.0)
(67.3)
(66.5)
(65.8)
(65.6)
(66.0)
(66.4)
(66.6)
(66.8)
(66.8)
(270.5)
(734.5)
Film Credits
Nominal $ (M)
0.0
53.5
78.5
42.0
42.0
80.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
396.0
1,196.0
Revenue from Program Activity
Nominal $ (M)
33.2
225.5
461.5
9.3 FY2011
23.8 FY2012
31.3 FY2013
31.1 FY2014
31.6 FY2015
32.0 FY2016
32.8 FY2017
33.5 FY2018
34.2 FY2019
34.4 FY2020
34.0 FY2021
33.6 FY2022
33.4 FY2023
33.2 FY2024
FY2025 Minimum Maximum
Total Employment
Jobs
4,972
10,258
12,531
11,476
10,886
10,084
9,601
9,284
9,090
8,776
8,273
7,818
7,415
7,063
6,748
4,972
12,531
Private Non-Farm Employment
Jobs
4,589
9,621
11,819
10,819
10,364
9,881
9,620
9,361
9,169
8,875
8,411
7,991
7,615
7,279
6,974
4,589
11,819
Government Employment
Jobs
381
637
712
656
522
204
(19)
(78)
(80)
(99)
(139)
(174)
(199)
(216)
(228)
(228)
712
State Government
Jobs
19
(110)
(201)
(179)
(289)
(593)
(815)
(873)
(876)
(882)
(894)
(902)
(902)
(896)
(886)
(902)
19
Local Government
Jobs
363
747
912
835
810
797
796
795
796
784
756
728
703
680
658
363
912
Population
Persons
1,004
2,744
4,722
6,086
7,099
7,928
8,630
9,196
9,650
9,993
10,215
10,339
10,385
10,374
10,321
1,004
10,385
Jobs per $million real GDP
Jobs
11.5
11.2
11.0
11.0
11.0
10.6
10.3
10.1
9.8
9.7
9.5
9.3
9.1
9.0
8.8
Note: All figures reflect the change from the baseline.
Page 26 Analysis - Film Tax Credit Program - Final
Florida Entertainment Industry Financial Incentive Program Analysis
Appendix E – Comparison of the 3 Program Levels REMI Model Impact Projections of the Film and Entertainment Tax Credit Program Through FY 2017-2018 Current Program
Permanent Permanent $42 Million $100 Million Program Program 2,862.5 4,266.0
Personal Income
Nominal $ (M)
2,208.5
Disposable Personal Income
Nominal $ (M)
1,969.0
2,537.5
3,765.0
Real Disposable Personal Income
Fixed 2005 $ (M)
1,846.0
2,368.5
3,411.5
Gross Domestic Product
Fixed 2005 $ (M)
3,748.0
4,912.5
Ratio - GDP : Film Credit
Fixed 2005 $ (M)
Output
Fixed 2005 $ (M)
Total Net State Revenues
Nominal $ (M)
Ratio - Net Revenues : Film Credit
15 : 1
17 : 1
6,162.5 (178.9) 2:5
7,324.5 22 : 1
8,052.5 (227.9) 2:5
11,988.5 (270.5) 3:5
Total Change in State Expenditures
Nominal $ (M)
(178.9)
(227.9)
(270.5)
Film Credits
Nominal $ (M)
296.0
338.0
396.0
Revenue from Program Activity
Nominal $ (M)
117.1
152.1
225.5
REMI Model Impact Projections of the Film and Entertainment Tax Credit Program Through FY 2024-2025 Current Program
Permanent $42 Million Program
Permanent $100 Million Program
Personal Income
Nominal $ (M)
2,189.5
4,647.0
8,783.0
Disposable Personal Income
Nominal $ (M)
1,973.5
4,121.5
7,750.0
Real Disposable Personal Income
Fixed 2005 $ (M)
1,871.0
3,700.0
6,659.0
Gross Domestic Product
Fixed 2005 $ (M)
Ratio - GDP : Film Credit
3,483.5 14 : 1
Output
Fixed 2005 $ (M)
Total Net State Revenues
Nominal $ (M)
Ratio - Net Revenues : Film Credit
5,726.5 (181.4) 2:5
7,122.0
13,233.5
14 : 1
15 : 1
11,591.5
21,471.5
(429.1) 2:5
(734.5) 2:5
Total Change in State Expenditures
Nominal $ (M)
(181.4)
(429.1)
(734.5)
Film Credits
Nominal $ (M)
296.0
674.0
1,196.0
Revenue from Program Activity
Nominal $ (M)
114.6
244.9
461.5
REMI Model Impact Projections of the Film and Entertainment Tax Credit Program Employment and Population Through FY 2024-2025 Current Program Minimum
Maximum
Permanent $42 Million Program Minimum Maximum
Permanent $100 Million Program Minimum Maximum
Total Employment
Jobs
(1,198)
12,531
2,612
12,531
4,972
12,531
Private Non-Farm Employment
Jobs
(897)
11,819
2,747
11,819
4,589
11,819
Government Employment
Jobs
(559)
712
(351)
712
(228)
712
State Government
Jobs
(712)
19
(704)
19
(902)
19
Local Government
Jobs
(13)
912
269
912
363
912
Population
Persons
1,004
5,898
1,004
5,995
1,004
10,385
Note: All figures reflect the change from the baseline.
Page 27 Analysis - Film Tax Credit Program - Final
