“There are three kinds of lies: lies, damned lies, and statistics.”

Mark Twain on Disraeli from Chapters from My Autobiography

There is the lie that Arizona’s elected officials serve, protect and defend the Constitution as the State Legislature and Governor’s office continue to violate the no public gifting clause of the Arizona State Constitution.

There is the damned lie that Arizona’s massive government sponsored corporate welfare programs are a good investment in the future of Arizona’s citizens when in fact these very programs are little more than a thinly veiled seed money scheme to obtain future political campaign funding from the wrongful investment of the people’s money into special interests.

Finally, there are the statistics used to rationalize the theft of the public’s money through the use of fraudulent statistics. One case in point would be the Motion Picture Production Tax Incentive Program created by the 2006 Arizona State Legislature.

Arizona State Treasurer, Dean Martin, recently stated (KTAR NEWS 620, 12/02/2009) that Arizona is out of options when it comes to acquiring more debt to finance its remaining $1.6 billion dollar budget shortfall. This has led Arizona Governor, Jan Brewer, to publicly bemoan the “fact” to the Arizona Republic that “We could cut every government service in the state of Arizona, except that which is mandated by the federal government, and we still wouldn't balance the budget. (http://www.azcentral.com/news/articles/2009/11/30/20091130ariz-budget-ON.html ).”

So, we are to believe that the Governor has looked high and low for places to cut the budget? Well, I know where the Governor can pick up a quick $50 million dollars and the corporate welfare program that should be eliminated is not federally mandated, unless President Obama and the Federal Reserve have secretly acquired the Hollywood entertainment industry during the last round of corporate bailouts.

In 2006, the Arizona State Legislature established the Motion Picture program is established by A.R.S. §41-1517 and 41-1517.01. The program is administered by the Arizona Department of Commerce (http://www.azcommerce.com/Film/) which created a  Motion Picture Production Tax Incentive Program (MOPIC).MOPIC consists of seven separate tax incentives available to applicants for motion picture productions or commercial advertisements as well as music videos. This government originated corporate welfare tax giveaway incentives include five exemptions from State transaction privilege taxes (TPT) a use tax exemption and income tax credits.

In Calendar Year 2008, $50,000,000 in income tax credits were authorized for allocation across the three programs involving the entertainment industry. Brewer and the legislature would use the typical mantra that politicians enjoy repeating, when they are caught giving away the people’s money to the rich and famous, “We are investing in Arizona’s future, the $50 million dollars will create new job, good jobs. It would be shortsighted to not invest in our future.” Does this unique version of corporate giveaways truly create the financial bonanza, for taxpayers, the Brewer and her fellow “statesmen” claim?

In 2008, the Arizona Department of Commerce received a total of 92 applications from46 separate production companies. Of these, 70 were ultimately pre-approved. Applicants pre-approved in 2008 spent an estimated total of $573,085,245 on their productions, of which $331,186,027 was estimated to be actually spent in Arizona. Of the six applicants which were post-approved by MOPIC, their aggregate spending on productions totaled $119,295,126. In other words, only $44,900,039, or 38%, was spent in Arizona. Does anyone else hear the sucking sound which extends all the way back to California?

According to the Arizona State Department of Commerce, for every $1 spent by MOPIC, only 40 cents ends up somewhere back in the Arizona economy. MOPIC is credited with creating only 317 direct jobs. Lies, damned lies and now here’s a real statistic: For every direct job created by MOPIC, it cost the taxpayer of Arizona approximately $158,000.  

In addition to creating massive amounts of jobs, another one of the benefits the legislature and the Governor’s office used to justify MOPIC giveaway was in the claim that it would stimulate additional tax revenue. In 2008, the estimated state and local tax revenue generation resulting from MOPIC was $2,317,566. However, the tax credits received by these applicants totaled $8,641,589, resulting in a net loss to the State’s general operating fund of $6,324,023. Libertarians already know that socialism is, and always has been, an abject failure. Arizona’s brand of socialism is the poster child for this failure.

The Updated Scorecard for Arizona State Sponsored Corporate Welfare

Balance forward:  Total   $ 2, 592, 400, 000 

MOPIC                                       50, 000, 000                                 

NEW AGGREGATE TOTAL     $  2, 642, 400, 000 

Meanwhile, the Governor and the legislature are still looking for places to cut? Fifty million dollars would be a good place to begin instead of raiding our children’s classrooms.

Arizona State Government is unquestionably the King of government sponsored corporate welfare. Isn’t it ironic that state government coffers continue to have plenty of money for corporate giveaways for special interests such as MOPIC, in order to benefit the rich and famous?

By continuing to blindly re-elect our political incumbents, we not only encourage these unhealthy practices, but we do so at the expense of our state’s most vulnerable citizens.