Georgia Became the “Hollywood of the South” Through Massive Corporate Tax Breaks

The state of Georgia is subsidizing Hollywood CEOs to the tune of $1 billion a year. That money could go to schools, roads, health care, and good public jobs. But sure, a little peach logo in the credit sequence is cool too.

Georgia is offering film-tax breaks as an incentive for filmmakers to bring their productions to the state. (Elijah Nouvelage / Bloomberg via Getty Images)

Like many American industries of the past generation, the TV and film industry has globalized over the last two decades. Yet we still wield the outdated term “Hollywood” to describe work increasingly outsourced from Southern California.

That’s why Georgia may not immediately come to mind when considering the impact of the Writers Guild of America (WGA) and Screen Actors Guild — American Federation of Television and Radio Artists (SAG-AFTRA) strikes. While Los Angeles remains the corporate headquarters of the entertainment-industrial complex, the Peach State is the fastest-growing industry hub in the nation in terms of job growth and dollars spent in the state.

While glossy magazine stories may cite Georgia’s attractive scenery and diverse people and places as the reason for the trend, the truth is far more predictable. It’s all about tax breaks and cheap labor. For all of the conservative complaints about “woke Hollywood,” the real driving force in the movie and TV industry is not liberal social politics but studio executives’ bottom lines. Entertainment industry capitalists are always trying to improve their margins by cutting costs.

Meanwhile, state governments are always chasing big industries that they feel will create jobs. That’s why thirty-five states desperate for job creation now have some form of film-tax breaks to try to lure movies and TV shows to conduct business within their borders. Mark Wahlberg’s recent call for the creation of Hollywood 2.0 in Las Vegas, for instance, is less about artistic freedom and more about Nevada’s 1,900 percent increase in tax credits for film production over the next twenty years.

Rather than create economic prosperity, however, the tax break frenzy just instigates a race to the bottom. States compete to see who can dangle the lowest taxes and cheapest labor before money-hungry studios, resulting in depleted public coffers and suppressed wages, respectively. As two major Hollywood unions, WGA and SAG-AFTRA, are both on strike over deteriorating standard for jobs in the industry, no account of the deterioration of industry jobs would be complete without an analysis of this trend.

Hollywood didn’t really have Georgia on its mind until the state’s big tax giveaway in 2008.

Allegedly upset that the 2004 Ray Charles biopic Ray was shot in Louisiana instead of his home state, Governor Sonny Perdue signed a deal that offered a 20 percent incentive on productions of $500,000 or more, plus an additional 10 percent for a peach logo added to the credits, without a yearly cap. That’s money that could go to schools, roads, housing, health care, and good public jobs for the state’s large working class. But sure, a peach logo is cool too.

The industry’s dirty secret, which WGA and SAG (and the International Alliance of Theatrical Stage Employees, or IATSE, which nearly went on strike in 2021) have been spreading around, is that it also seeks to exploit cheaper labor when possible.

The domestic movie industry is worth $95.4 billion as of 2022, but almost all of that goes to padding out the designer wallets of Hollywood’s corporate executives and a few star actors. There’s no red carpet for the low-paid, overworked freelancers and temporary contractors hired for productions, often in unsafe conditions and without health care.

Unlike California, Georgia is a right-to-work state, which means unions are not allowed to require membership as a condition of employment. Nonunionized workers don’t have the same protections and benefits as their unionized colleagues and make about 40 percent less. Last year, union members earned an average of $2,200 a week, compared with $1,300 a week for nonunion employees, according to the US Bureau of Labor Statistics.

Add it up and it helps explain why thousands of Georgians were involved last year in making dozens of films, television shows, and music videos at the cost of $4.4 billion. The state also claims more than six million square feet of film stages, second only to California. The all-powerful Marvel behemoth has built a company town called Trilith just southeast of Atlanta. Lionsgate’s upcoming forty-acre, $200 million studio complex in Atlanta is more proof that Georgia is the Hollywood of the South.

The share of Georgia tax money to subsidize Hollywood broke last year’s $1 billion mark. Now economists are warning that the tax break strategy redounds to the benefit of the industry and not to the state itself. The state legislature is considering cracking down on the incentive, but lobbyists keep sounding the alarm on capital flight. It’s a credible threat because, if nothing else, Hollywood has proven it isn’t afraid to go where the grass is greener.