Deseret News | Utah offers $1M tax credit for 'High School Musical 4'

Reader comments
Utah offers $1M tax credit for 'High School Musical 4'

Ken Goddard | 1:26 p.m. May 14, 2009

Correction: Governor's Economic Bribery Council.

McGurkus | 1:29 p.m. May 14, 2009

This is unconscionable! At a time when thousands are going without food or shelter, tax money should not be sacrificed to entertainment. The state should be ashamed of itself.

JT | 1:54 p.m. May 14, 2009

Can't every Utahn at least get a free copy of one of the 4 High School Musicals filmed in the state? This is foolishness, giving the film industry money when our state is doing so poorly.

Comments continue below

Naruto | 1:58 p.m. May 14, 2009

Hey, if East High is a tourist attraction, it's bound to bring in more than a million dollars in revenue, not to mention creating thousands of jobs to film them.

Gillane | 2:49 p.m. May 14, 2009

McGurkus - We are not "Giving" anything, this is an INVESTMENT. When you understand ROI and really look into this, you will find the the state of Utah and it's citizens realize a full 500% to 700% return on this "investment". This is one of the only things our government ever touches that actually produces a real monetary return. This will employ literally hundreds of folks in so many different industries that contribute to the making a production like this. Investigate before you speak, maybe then you will understand how this actually helps in so many arenas. In case your not clear, let me help you out: Lets say that because I give you $1,000,000.00 you give me $6,000,000.00 WOW, I'd do that every day! I think the state could do much more with 6.0M than with just 1.0m. Victim's are those who do nothing and blame everyone else. Give me a fish and I eat for a day, teach me how to fish I'll eat for a lifetime...

Anonymous | 2:50 p.m. May 14, 2009

Its a good thing the people who comment here aren't in charge of our economy. Here is a quick primer for those of you who are obviously confused.

This is a tax credit of 20% which means they have to spend $5,000,000 in the state to get the $1,000,000 worth of credit. That is $5,000,000 worth of business into the Utah economy that otherwise wouldn't be here. They aren't handing over a million bucks. This doesn't cost Utah a dime. They are saying, if you do business here, we will waive a million bucks in taxes. If they don't make the movie here then we get nothing. If they come here because of the incentive we get scores of jobs and millions of dollars into the economy. Not to mention the increased tourism dollars the movies generate.

Don't offer the incentive and they just make the movie in Phoenix or whereever and you just let scores of jobs and publicity go to another state. That would be the travesty.

Hero of Canton | 2:59 p.m. May 14, 2009

Apparently some of the previous posters don't undertand the point of the tax credit. Utah is the 3rd most filmed in state in the Union behind CA and NY and every time there is a production here there is money spent. So if you lower the cost of doing the film for the production company they are more likely to film here thus giving more money to the local economy. If you don't give them $ they go film elsewhere so you lose the revenue. If you do, they film here and spend here.

I applaud the GOED for approving this, it brings jobs and money here to the state and local economy. They clearly are doing everything they can to help the local economy.

matt | 3:33 p.m. May 14, 2009

These incentives (bribes) to bring the film industry to Utah are unfair. Why do film people get money to make movies here but companies that do other things and are already here don't get anything? Don't they add anything to the economy?

DL | 5:06 p.m. May 14, 2009

Matt,

Who said existing companies go begging? The companies that are here are permanently here and benefit from other tax breaks and incentives. The film companies are transient and need coaxing.

Big businesses have always been enticed to certain locations by tax break incentives because local government knows how much $$ gets dumped into the local economy. Micron is just one I can think of off the top of my head.

ECON 1010 my friend. :-)

Good and Bad | 5:35 a.m. May 15, 2009

Sometimes giving can be good and generate more in return, but the only problem is that government is spending the return before they even see any of it. And if the expected return flops, then the tax payers get the bill for government spending what they didin't get. If this spending spree exceeds a multi-million dollar expected return is the problem in Utah. We citizens have been raped many times on this concept as our government operates on losses that end up costing tax payers. UTA and TRAX are prime examples of spending waste where tax payers are being defrauded of taxes. If government would operate on what they have and not what they expect from investing we would have better management of government funds. We are already spending money from the future and in this economy it can have more disastorus effects for all. Government spending should wait until they receive the returns and not before.

Craig | 7:43 a.m. May 15, 2009

If lowering taxes is good for out of state companies, it should be even better for companies that reside here. There are thousands of Utah companies that would do better with lower taxes, who will now subsidize Disney.

sallie | 8:06 a.m. May 15, 2009

I guess you have to balance what we "get" as to opposed to what we "give"....

The movie makes millions upon m illlions from High School Musical...does the state ?

splitme2 | 8:53 a.m. May 15, 2009

How come I thought HSM3 was supposed to be the last? It was 'senior year' and graduation. Will the new film take place on a college campus?

Joy | 10:14 a.m. May 15, 2009

This money goes strictly into the pockets of Hollywood insiders who immediately take it out of State. This tax giveaway does nothing to help this state.

Shirl | 11:03 a.m. May 15, 2009

Gosh, Joy, didn't you read the explanations above....the state DOES get a lot of money from this!

Vic | 11:16 a.m. May 15, 2009

Reading this board has seriously opened my eyes as to how naive and down right uninformed far too many people are. I guess it shows how Obama got elected. Let me simplify it. We are putting our tax rate "on sale". Yes it is 20% off but it is still 80% on, (which is $4 million more than we started with). It's not that complicated. It is the free market at work. Same concept as lowering taxes (especially on the rich). People keep more, they spend and invest more, and the tax revenue actually goes up. Think about it: would you rather have 40% of 1 million or 25% of 2 million dollars!!!

karish | 11:26 a.m. May 15, 2009

But we want Zac!!!!!

Consider this | 11:34 a.m. May 15, 2009

@Vic: Here's the scary thing: all the people you refer to as "naive" because they don't understand tax breaks? They're Utahns, who voted for McCain! I guess maybe it doesn't show as much about Obama's supporters as McCain's . . .

matt | 3:28 p.m. May 15, 2009

It looks like GOED staff is out in full force on the comment board.

Sure, many Utahns and the government may benefit from economic activity resulting from films made in Utah. But the economy isn't everything. There are principles that matter more, like a level playing field for all businesses, whether in- or out-of-state. If Hollywood's film production is worthy of a huge 20% tax incentive, then so is every other legal business in Utah. Every business should get 20% off their tax bill, whether it brings notoriety to Utah or not.

Tax "incentives" are really a redistribution of wealth, like any progressive tax system, from one group of people to another. In this case, the government takes money from all Utah tax payers, gives it to Hollywood in the form of an incentive, and then some people who do business with Hollywood while it's in town also get a piece of the pie. But what do the rest of the taxpayers get in return for their "investment"? Pretty much nothing.

RE: Vic | 3:32 p.m. May 15, 2009

"It is the free market at work."

A market is free when government does not intervene in it. So most of what GOED does makes the market not free. Since when did government know which industries are best for Utahns? Why films over something else? All these programs do is pick winners and losers...Hollywood and businesses in Utah that support it win, everybody else loses.

matt | 3:34 p.m. May 15, 2009

By the way, these film incentives are "refundable" tax credits meaning that if the business has a low enough tax rate, then it not only pays lower taxes but pays no taxes and takes home money.

In most cases, these film production companies are getting big tax refunds and paying nothing, which is basically a form of welfare, much like the Earned Income Tax Credit.

Ed Meyer | 8:51 a.m. May 16, 2009

The film incentive uses the same model as used for other businesses seeking incentives from the State of Utah. Existing businesses can also seek the incentive, but it's not a give away. They need to provide higher paying and jobs. They also need to demonstrate that the jobs would go elsewhere if the incentive were not available. There's no need to give away taxpayer money if it doesn't impact a company's decision. In the case of HS Musical, the issue is whether the movie would go elsewhere.. and it would. I retired from GOED three years ago and have done my part to provide critical input where I think they are wrong. This isn't the case. The only issue I see is to make sure their economic model for determining return on investment is not flawed.

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