Red States Are Starting To Crack Down on Disney’s Business Practices - Inside the Magic

According to a recent video from CNBC, 27 states are on the verge of going bankrupt. These states face massive budget cuts as they look for ways to pay their bills.

During the pandemic, the federal government gave states huge payouts to ensure that essential programs and workers were kept on the payroll. States used these funds not as a one-time windfall but as part of their budgets.

Now that the federal money has dried up, states are scrambling to make ends meet. And with the new Trump administration that’s coming in January promising massive budget cuts at the federal level, states cannot look for a bailout from the feds.

So, what’s a state to do? They have started looking at programs that don’t directly impact its citizens where they can cut, and Louisiana has found just the place to cut.

Lawmakers in Louisiana just passed a budget that could cut $55 million from the amount that film and television productions can claim toward a tax incentive. The film and television tax incentive is used to lure productions into various states and is frequently used by The Walt Disney Company when filming on location.

Disney has used Lousiana’s credit for films like The Haunted Mansion (2023) and the Disney+ show National Treasure: Edge of History. In the case of The Haunted Mansion, the tax credit helped offset some of Disney’s massive losses on the film.

In Louisiana, lawmakers had proposed cutting the tax incentive entirely but instead lowered the amount that can be deducted from $180 million to $125 million. That deduction can cost Disney as much as $5.5 million per film.

Earlier this year, Georgia narrowly defeated a bill to eliminate the state’s film tax incentive. However, with a new legislature this year, they will likely revive that bill.

Disney has taken advantage of this incentive by filming many of its Marvel Studios films in Georgia. Captain America: Civil War (2016), X-Men: First Class (2011), Ant-Man (2015), Guardians of the Galaxy Vol 2 (2017), Spiderman: Homecoming (2019), and Avengers: Infinity War (2018) were all filmed in Georgia.

These films have budgets of hundreds of millions in the state, which doesn’t include what the cast and crew spend locally on food and lodging.

Disney moved much of its production from Florida to Georgia after the Sunshine State eliminated its film tax credit in 2016. Florida is one of only 12 states in America that don’t offer some sort of tax credit or rebate for filming in the state.

States like New York and California offer massive tax credits to film productions; however, they are two states facing the most significant budget shortfalls for next year.

With more states looking to balance their budgets, Disney should expect more to consider limiting or eliminating their film tax credit. However, Disney can just move its filming to the United Kingdom, which offers generous credits for filming there.

With things getting more challenging for Disney in America, perhaps the UK might work out for them.