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Pennsylvania Society to Honor Filmmaker Who Got $48 Million in Subsidies

M. Night Shyamalan has enjoyed more than $48 million of subsidies from Pennsylvania for his two most recent films. He will be honored by the Pennsylvania Society this weekend in New York.

By Eric Boehm | PA Independent

HARRISBURG — A filmmaker who received more than $48 million in subsidies from the taxpayers of Pennsylvania will be the honoree at this weekend’s Pennsylvania Society dinner in New York City.

The annual gathering in New York is one of the oldest and grandest political events of the year, attracting Pennsylvania’s most powerful elected officials, lobbyists, staffers and hangers-on for a weekend of drinking, socializing, wheeling and dealing in the Big Apple.  The centerpiece of the four-day extravaganza is the 114th Pennsylvania Society Dinner, which includes an honorary speaker who usually has some connection to the Keystone State.

M. Night Shyamalan, who is best known for films with twist endings like his award-winning thriller The Sixth Sense, will be honored at this year’s event.

An immigrant from India who now lives in Pennsylvania — he has set and filmed most of his movies in Philadelphia or its suburbs — Shyamalan will join the ranks of previous honored guest speakers that include Winston Churchill, Henry Ford and Dwight D. Eisenhower.

But unlike those prominent figures, Pennsylvania taxpayers have helped line Shyamalan’s pockets thanks to $48 million in subsidies he received for two films — he got $12 million for 2008’s The Happening and $36 million for 2010’s The Last Airbender through the state’s Film Tax Credit program.

The tax credit is a $60 million annual giveaway to Hollywood studies in an attempt to lure production companies to Pennsylvania.  Supporters of the credit say it helps attract jobs to the state, but critics say those jobs are generally low-paying, short-term and in many cases would have existed without the tax credit incentive.

Nathan Benefield, research director for the Commonwealth Foundation, a free-market think tank in Harrisburg, said Shyamalan represents the American free-enterprise system where an immigrant can make a fortune, but he also represents the “crony capitalism that is rampant in America today.”

“The twist at the end of this movie is that tax breaks and corporate welfare don’t improve the overall state economy,” Benefield wrote in an email.

Liberal groups like the Center for Budget and Policy Priorities agree with conservative groups like Commonwealth Foundation that film tax credits do little to stimulate economic growth.

Still, the state continues to hand out money to Hollywood filmmakers like Shyamalan.

Perhaps it is fitting that a recipient of corporate welfare will be honored at a dinner that was started by Andrew Carnegie and his “robber baron” friends in the 19th century.  Nothing in Pennsylvania politics better represents the symbiotic relationship between government and big business like the Pennsylvania Society weekend.

Dave Patti, president and CEO of the Pennsylvania Business Council, said it’s easy to make the charge that the Pennsylvania Society is all about the rich and powerful of the state working together to improve their own fortunes, but the reality is that all 12.5 million residents of the state stand to benefit from this major social affair — in the same way that working-class families are helped by the jobs attracted by the Film Tax Credit, he said.

By bringing together politicians and executives who are normally scattered between Philadelphia, Harrisburg, Pittsburgh and Washington, D.C., the event provides a “neutral field” for important networking that affects the policy-making process, Patti said.

It’s particularly important this year, with the so-called “fiscal cliff” negotiations on-going in Washington, D.C.,, and major state concerns like pension costs and transportation funding being teed up for next spring’s legislative session.

“To have everybody in one place is really important,” Patti said. “And if we can convince congressional leaders to handle the fiscal cliff the right way, all 12.5 million Pennsylvanians get to benefit from this.”

The dinner owes its origins to a Pennsylvania native named James Barr Ferree, who was living in New York in 1899 and invited about 50 of his fellow Pennsylvanians to join him for a dinner at the Waldorf-Astoria Hotel.

They decided to meet at same location the next year and invited Winston Churchill — then a British journalist and member of Parliament some 30 years before he would become prime minister — to be the first guest speaker.

Today, the Pennsylvania Society Association is a charitable nonprofit not affiliated with any political party or interest and claims more than 2,000 members.

And while the dinner is the centerpiece of the weekend, it is also only the tip of the iceberg.  More than 50 satellite events — including fundraisers for top politicos like Gov. Tom Corbett, U.S. Sens. Bob Casey and Pat Toomey, and members of the state’s congressional delegation — are planned.

Politically connected law firms and major industrial players like natural gas drilling giant Consol Energy also host receptions in and around the Waldorf-Astoria.

Though the event was historically a Republican gathering, it is much more bipartisan today — in much the same way that corporate welfare is a bipartisan effort.

Contact Eric Boehm at Eric@PAIndependent.com and follow @PAIndependent on Twitter for more.

— Edited by Kelly Carson, kcarson@watchdog,org

Andrea405 December 09, 2012 at 12:17 AM
It's a clever idea that tax subsidies would bring production to the state, but if BOTH the liberals and conservatives agree that it is NOT contributing to a bigger payoff back to the state, then it most likely is true and the program should END. The purpose of the subsidy is not working. It's absurd the gala is not in Pennsylvania. Man Landers and Scoty are absolutely right, Shyamalan has been making duds for over ten years. Can we have our $48 million back?
Man Landers December 09, 2012 at 01:58 AM
Andrea405 - This has been successful if measured in politician/celebrity photo opps and name dropping opportunities. "Oh yes, we had "Night" in Harrisburg the other night. Respectful fellow."
Chris December 12, 2012 at 11:25 PM
I really wish that we could have open and honest conversations nowadays without them turning political and discussions based on MERIT. There was a study requested by Republicans for the tax incentive that was championed by Democrats. Here are the results: http://filminpa.com/wp-content/uploads/2009/06/Independent-Analysis-Validates-the-Effectiveness-of-PA-Film-Tax-Credit.pdf That said, I am a member of the motion picture industry here in Pennsylvania. The tax incentive is NOT about Hollywood and it's not about sending money out of state. it's about keeping us PENNSYLVANIANS employed. When a movie comes here to film, that $20 million budget is being spent HERE IN PA. It's paying the crew wages and those wages are collecting the PA State Income Tax. It's paying for hotels, restaurants, lumber, paint, equipment used to make the movie. It enables me to stay here in PA and work instead of having to leave PA and go work elsewhere. Selfishly, I want to work in PA. I want to stay here with my family and take my kids to school. The tax incentive more than pays for itself. Those jobs would NOT exist if the incentive was here, because the jobs wouldn't be here. Just like the David O Russell movie that just went to Boston and a tv show that went elsewhere - no tax incentive is no job for me and a couple thousand other people come February. Don't make it a political thing. It's a common sense thing. It keeps us employed and it pays for itself. It's a no brainer.
David December 12, 2012 at 11:58 PM
You make it sound like the taxpayers put the money directly in Shyamalan's pocket. Regardless of what you think of his films, his investors pay him millions to make them. And he chooses to make them here. That puts millions into the local economy. Filmmaking is a business. It is a business that has the flexibility to go wherever the product can be made cheaply. Without the tax credit, they cannot be made competitively with the government subsidies in locations like Canada or even Eastern Europe. This has an impact on hundreds of Pennsylvanian jobs. If you want to go after subsidies, why not go after the PA tax subsidies paying for the destruction and poisoning of Northern Pennsylvania to harvest natural gas?
Sharon p December 13, 2012 at 01:51 AM
To say M Night "lined his pockets" with taxpayer money is disingenuous. That money went towards production of multimillion dollar features that pumped a large portion of that back into the PA economy via living wages (not so low. How much does this author earn an hour?) for local crew and payroll deductions from out of state crew. Not to mention all the ancillary businesses who benefit. I can tell you I personally spent at least a 100k to local business on the last 3 movies shot in Philly. To those of you who can just say end jobs for hundreds of locals, how is this different from losing MILLIONS in taxes from multimillion dollar fracking companies that bring in ALL outside employees? This city has been a vibrant center of filmmaking and now that many states offer bigger tax incentives than PA, that's where productions will go. They will stay away from PA and you can kiss our industry goodbye. Mr Boehm, you do the fine filmmaking crews in our state a huge disservice by not recognizing how important the art of film is to our economy.

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