Last month my organization, the Arizona Free Enterprise Club, launched a statewide campaign to raise awareness of the continuing problem of corporate welfare and special interest handouts being pursued at the state legislature. In particular, we want voters to be informed when their lawmakers are more interested in helping out politically-connected industries and lobbyists than hard-working taxpayers.
One of our main targets has been a taxpayer giveaway we have battled for years—Senate Bill 1242, tax credit legislation that would divert $900 million dollars in subsidies to the movie industry. If this idea sounds familiar, it’s because Arizona already tried doing a film subsidy program back in 2005. That tax credit program ended up lasting five years, and to no one’s surprise it failed spectacularly.
Of course the Hollywood crowd is promising that this giveaway will be different, and has secured the support of State Sen. Al Melvin. In a guest opinion written earlier this month, “Separating Fact from Fiction in debate over film tax credit”, Sen. Melvin defended his sponsorship of this tax subsidy legislation by proclaiming that it is a “jobs bill” for Arizona, citing economic impact studies that were (not surprisingly) funded by the movie industry. In Melvin’s world, if someone walks into his office saying their business will create a job, he has a special tax break waiting for them.
What Sen. Melvin fails to grasp is that his “jobs bill” mantra is the same logic used to justify other taxpayer rip-offs such as Solyndra, Fisker and Suntech, all of which promised new jobs and investment in the same manner this bill does. The reality is that boondoggles like SB 1242 only encourage more corporate welfare and provides justification for other bad ideas. After all, when one business or industry receives a special tax break, what will stop others from getting in line as well?
Sen. Melvin also claims that the legislation is necessary because other states are stealing the movie business from Arizona. Even if this nonsense was true, it doesn’t explain why seven other states have suspended or eliminated their programs due to their failures. And if we need a case study on why Arizona should never even consider this program again, look no further than Michigan, where the program has been a complete disaster and cost taxpayers millions.
This issue isn’t about jobs or competing with other states, this is about whether or not the government should be in the business of picking winners and losers through our tax code. Robbing taxpayer Peter to pay special interest Paul is not what Arizona needs, nor is it what hard working citizens of this state expect from our lawmakers. The best tax system is one that treats all businesses and taxpayers the same, not one that plays favorites.
My organization’s battle against corporate welfare has just begun. It is our plan to continue our campaign against Hollywood subsidies and any other proposal that seeks to direct our tax dollars to special interests at the legislature. Arizona taxpayers deserve better.
(Editor’s Note: Scot Mussi is Executive Director of the Arizona Free Enterprise Club, a pro-growth organization promoting economic freedom in Arizona.)