How the movie incentive actually helped Utah’s economy

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SALT LAKE CITY – Utah’s film industry has suffered serious economic setbacks in recent years. The productions left the state and COVID-19 shut down the industry.

Like all businesses across the country, Utah’s film community is trying to get back on its feet and rebuild itself. With the changes in the way the film industry does business around the world and in the United States, Utah has found itself at a competitive disadvantage.

Utah’s beautiful and unique geography is no longer enough to make great movies in the state

Film production companies are now looking for incentives to do business in various locations. If well managed, film incentives help local economies.

When it comes to incentives, states like Mississippi, Hawaii, New Mexico, Louisiana, and Georgia are cleaning the ground with Utah competitively. Most of these states have caps. Georgia does not. Many Marvel movies are made in Georgia, as well as other productions, including one that left Utah for there.

“Avengers: Infinity War” is said to have added $ 172 million to Georgia’s economy alone.

This year, Utah lawmakers are urged to raise the cap on incentives for films in Utah.

Cinema incentives are very complicated, but do they really help a state? The answer is that they help a lot.

ABC4 received data from a study from the Gardiner Policy Institute. We asked Kem C. Gardiner Policy Institute research economist Joshua Spolsdoff to explain the impact.

In the previous ABC4 article, we used an example of a $ 80 / $ 20 split. Spolsdoff said he liked our example, but to add this:

“When you think of $ 100 going into the state of Utah, it’s money that goes into the economy of Utah as a whole, it’s not $ 100 that goes straight back to the state of Utah. ‘State in the form of income. A little goes to the state in taxes, but most of it goes directly to businesses and residents of Utah, through purchases from local businesses and salaries paid to local residents. When you say that the state is going to return $ 20, you are looking at the money that comes specifically from the state coffers. “

It’s important to realize that the $ 80 benefits Utah as a whole.

Spolsdoff points out that from the film industry itself, 32 cents of every incentive dollar goes back into state coffers. For Utah as a whole, every dollar of value-added film industry spending generates $ 2.3 of total GDP, according to the Policy Institute. This is the “multiplier effect” that you see in these economic impact studies.

Spolsdoff says, “We’re talking about the Utah economy as a whole in terms of the multiplier effects, but that also benefits the state government. Take a hypothetical example, if Utah’s economy is worth $ 100 billion and suddenly it is worth $ 200 billion, the state will have more money in the economy to tax on.

The first number we talked about is return on investment (ROI). What happens when the movie incentive is considered an investment in Utah. What’s the return?

The Gardiner Institute reported that it was 14 to 1. For every dollar spent, there was an impact of $ 14 on the Utah economy.

Spolsdoff says, “If you look at the state level, for every dollar of incentive paid, it’s associated with about $ 14 in new state GDP. (Gross domestic product).”

Gross domestic product is the value of total sales less the cost of the goods and services purchased to produce those sales.

In 2018, Beehive state film industry created 2,554 new jobs

Rural Utah was also helped. Outside of the Gardiner Institute report, according to the Utah Film Commission annual report, “54.2% of business takes place in rural Utah. Majority in Emery, Grand, San Juan, Summit, Tooele, Wasatch and Washington counties.

There was $ 114.6 million in new state revenue and $ 201 million generated in state GDP.

The thing to remember about what the movie incentive does is bring money into the state that wouldn’t exist here without it. It’s new money coming into Utah. That’s why it helps local economies.

Spolsdoff says, “It’s the same in Georgia, where they have these economic incentive programs that are stronger than ours. These programs bring in higher value productions, which in turn increases expenses throughout Georgia. These are expenses that could potentially be here in Utah, possibly helping our rural economies. As a community, we have to decide whether it makes sense to devote more resources to film or something else, but you can’t say that these film incentives don’t bring growth to the state.

The cinema incentive bill SB 167 has been approved by the legislature and will go to the governor to be signed. 1.6 million was added to the fund and another 500,000 were added to a fund for small productions. A total of $ 2.1 million was added to the state incentive program.


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