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EDITORIAL: Maryland’s collapsing ‘House of Cards’

State’s handouts to Hollywood hurt the folks at home

- - Friday, April 4, 2014

The legislature in Maryland agreed Friday to pay an $18.5 million ransom to the producers of "House of Cards" to keep the Netflix drama filming in the state.

Frank Underwood, the fictional politician who stars in the series (a knockoff of the British original starring Ian Richardson), would have been impressed by the hardball tactics to double the state subsidy and tax credits. Producers threatened to stop the filming in Baltimore, pack their bags and scout out locations in some other state that looks sort of like Washington, taking 690 jobs with them.

The thought of celebrities leaving the state horrified politicians in Annapolis. State Sen. Edward J. Kasemeyer, no doubt with memories of the departure of the beloved Baltimore Colts in the dark of night, called for using eminent domain to seize the property of any business that flees the state after it receives tax credits. ("House of Cards" has taken $7.5 million in taxpayer gifts.)

It's a familiar drama, which has unfolded several times across the country as states attempt to lure movie and television production from California and New York through various subsidies. These efforts peaked in 2010, according to the nonpartisan Tax Foundation, when as many as 40 states offered tax incentives collectively valued at $1.4 billion. Such freebies have declined as experience teaches wide-awake lawmakers that Hollywood offers a lot of glitter and not much gold.

The promise of jobs is an illusion. The "House of Cards" tax credits will cost almost $27,000 for each full-time job — jobs that are not permanent. They vanish when a show is canceled and the sound stages are folded and taken away. A series of studies by Ernst and Young and various state agencies calculate the return on such investments tends to be below 30 cents on the dollar. Connecticut's own study found the lowest return of 7 cents for every dollar spent; Maryland's neighbor, Pennsylvania, did slightly better at 24 cents, hardly a worthwhile "investment."

Facts and figures don't mean much to politicians dazzled by glitz and glamour. They like boasting to constituents that they're "involved" in the hit show. Nothing appeals more than the chance of bumping into Kevin Spacey at a night on the town in Annapolis. They're eager to spend as much of other people's money as it takes to make it happen.

Propping up Tinseltown comes at high cost to other industries. The "Free State" is one of the least free when it comes to taxes. It ranks 41st of all states in business tax competition and 12th highest in terms of overall tax burden. Everything an average Marylander earns until April 21 goes to Uncle Sam and Gov. Martin O'Malley. The runaway taxation is the issue the General Assembly should be addressing, instead of chasing celluloid celebrities with gossamer "incentives."

It's never the job of a legislature to pick winners and losers with preferential taxes for one industry over another. "House of Cards" should decamp to Maryland not because it's the source of handouts, but because it has the most business-friendly policies. That's building a house of something more substantial than cards.