(The Center Square) – Nevada’s film industry bills face uncertainty in the wake of a predicted $191 million shortfall for the state’s two-year budget.
The competing bills, Assembly Bill 238 and Senate Bill 220, would give out $120 million and $100 million in tax incentives respectively to lure Hollywood to the Silver State. But the big price tags could present problems as the state looks to cut spending.
“At its core, AB 238 is about investing in Nevada’s future, creating opportunities for hardworking Nevadans, growing and diversifying our economy, and establishing a long-term sustainable industry that will benefit our community for decades, said Assemblymember Sandra Jauregui, D-Clark County, AB 238’s co-sponsor. Clark County is home to Las Vegas, a popular filming site.
“More than a billion and a half dollars will be invested and thousands of construction jobs created before a single dollar is earned in tax credit,” Jauregui said at a Feb. 27 Assembly Revenue Committee meeting.
Both bills have said investments by corporations like Sony and Warner Bros. would come into the state before any tax incentives were cashed.
AB 238 would support Burbank-based Warner Bros. and Culver City, Calif.-based Sony Pictures in a joint venture at Summerlin Studios, a 31-acre Las Vegas facility that would be built if the bill passes.
SB 220 is supported by Birtcher Nevada Development and the MBS Group at the Harry Reid Research & Technology Park in Las Vegas.
AB 238 will be discussed further during an Assembly Ways and Means scheduled for Friday. No meeting is scheduled for SB 220, but state Sen. Roberta Lange, D-Clark County, said one would likely come by the end of May.
“People say, ‘We’re in a budget deficit. Why would you do this bill?’ I say, ‘Why wouldn’t I do this bill?’ ” Lange told The Center Square Wednesday. “It’s just the time we need to do it.”
“We need to diversify our economy here in Nevada and particularly in southern Nevada,” the senator said. “We had COVID and all the resorts shut down. It was eerie. We went and drove down the strip just to see what it was like, and it was so eerie not to have any businesses open. We need to figure out a way in Nevada, and I think this is the vehicle.”
But the looming $191 million that will need to be cut out of the state’s budget for the next two years will likely raise questions about these expensive film industry bills.
Nevada’s State Education Fund has also had a predicted $160 million less in revenue over the same two-year period. For 2023, the $8.6 billion fund accounted for over three-fourths of the state’s education funding bill.
“We have a looming federal budget crisis that could potentially cut hundreds of millions of dollars from our education programs, and for some reason, Carson City is entertaining another Hollywood handout,” said Alexander Marks of the Nevada State Education Association to Fox 5. “We can’t afford giant tax credits to corporations.”
Lange said she was not too worried about budget hold-ups as her SB 220 bill would not use state funds until 2028. “I’m just asking people to have a vision for the future.”
With some notable differences, the two bills offer generally the same proposal to Nevadans – a hefty sum from the state to potentially spur a new industry that could offer billions in returns. It’s a risk both sides – Lange and Assemblymembers Jauregui and Daniele Monroe-Moreno, D-Clark County – are willing to take.
But it’s not a risk that all parties involved have been able to come together on.
“I’ve had conversation with them. They have not had conversations with me – I mean except when I go to them,” said Lange of the two AB 238 sponsors. “I’ve talked to Sony and Howard Hughes (two companies supporting AB 238), and they’re willing to have discussions about merging the bills. The problem is the sponsors of the (Assembly) bill don’t see a pathway forward to merge the bills.”
Jauregui and Monroe-Moreno did not respond to a request for comment by The Center Square.
