Thursday, December 04, 2014

Bobby Jindal's Louisiana

See we used to have this affordable, quality state university.
University of New Orleans president Peter J. Fos on Thursday recommended closing seven degree programs and eliminating the Department of Geography as part of an ongoing effort to strengthen and restructure the university after years of declining enrollment.
The programs recommended for closure include:
  • B.S. in Early Childhood Education
  • M.Ed. in Special Education
  • Ph.D. in Curriculum & Instruction
  • Ph.D. in Special Education
  • M.A. in Political Science
  • Ph.D. in Political Science
  • M.A. in Romance Languages
Fos also recommended a number of other cost-saving measures, including: requiring department chairs to teach a minimum of two courses in the spring and fall semesters to lower dependence on adjuncts instructors; eliminating 10 instructor positions; reducing the adjunct budget by $1 million; and cutting four positions from the Earl K. Long Library.
But then we stopped spending money on that and gave it all away in tax breaks for rich people so they could help us do this.
In a year of flops for Hollywood, 2011’s “Green Lantern” was a memorable bomb, barely making back its $200 million production budget at the box office.

Happily for Warner Brothers, the studio didn’t have to put up all of the money.

Louisiana taxpayers promised $35 million through a generous subsidy program that covers 30 percent of a film’s local costs. And if state cost-benefit analyses are to be believed, the state recouped only about $8 million of its investment.

By way of comparison, Louisiana sank more into “Green Lantern” than it is putting into the University of New Orleans this year.
The thing to understand about the film tax credit is that it's not just a giveaway to film producers (although they do have the option of just taking a direct paytment.)  It's actually a big tax rebate for wealthy elites who have access to the secondary market on the credits. 
Film productions don’t have any corporate tax liability because they are set up as limited liability companies that simply make payments to actors, crew and vendors. Profits from a film are taxable, but they go to the film’s investors, who are usually based elsewhere.

As a result, most productions sell their tax credits to someone who owes taxes, which is legal under state law, usually getting about 90 cents for each $1 worth of tax credit. Buyers, many of them wealthy movers and shakers, get 100 cents on the dollar from the state, creating a group of influential middlemen who benefit from the program.
In Louisiana, "wealthy movers and shakers" typically means a lot of people who will probably end up in jail or at least in civil court at some point.  Which is why this story has been so much fun to follow.  Lord knows we here at the Yellow Blog have been talking about it for years

But really, you should just read that Advocate piece.  They pretty much cover everything, including a side bit on the many scandals involving the program.
Since (Mark) Smith’s 2007 indictment, at least eight other people have been charged with crimes related to the film incentive program. They include Wayne Read, who was sentenced to four years in prison for selling bogus tax credits to several members of the Saints, among others, and Michael Arata, a prominent attorney married to one of New Orleans Mayor Mitch Landrieu’s top aides, whose trial is set for January. More indictments appear to be in the works.
Of course my personal favorite will always be the Kevin Houser as "Uncle Rico" Saints players episode.  It's been fun.  But has it been worth it?  We'd probably get some interesting responses to that out at UNO today.

1 comment:

Nolaresident said...

And the Univ. of Alabama-Birmingham is shutting down football, bowling and (?) rifle.