fbpx

The Situation May Not Be As Bad As It Seems

Are taxpayers subsidizing MTV’s Jersey Shore?

That’s what some of my friends are saying. 

I usually agree with InTheLobby and Declan O’Scanlon, but in the case of the New Jersey Economic Development Authority granting a $420,000 tax credit to MTV for the 2009 production of Jersey Shore, I’m not so sure.

I’m not fan of the show.  I never watched it.  The promotions and buzz about it are enough for me to know that I’d rather see a Law and Order re-run.   Yet, there is no denying that the show has generated quite a bit of economic activity.  That’s what tax credits are supposed to do.

Tax credits are not subsidies in the sense that the government is writing a check.  They are promised tax reductions given to induce investment that will, hopefully, generate economic activity and more overall tax revenue than the amount of the credit.   Since Governor Christie has taken office, New Jersey has granted much larger tax credits to spur investment in Atlantic City and the Meadowlands.

Is the Jersey Shore tax credit a good deal for New Jersey?  I don’t know.  The Treasury Department would have to calculate the increased tax revenue that resulted from the show.   It would take $6,000,000 in increased sales of hair gel, contraceptives and alcohol to generate $420,000 in sales tax to “break even” on the tax credit.  I don’t buy hair gel or contraceptives.  I don’t watch the show, so it hasn’t driven me to drink more.  We’d have to rely on Treasury data to judge if increase sales taxes paid for the tax credit.

But we’d also have to include increased income taxes in the analysis.  How much do Snooki, the Situation and the rest of the cast pay to New Jersey in income taxes? What about the rest of the crew?  What about the increased income, and taxes for Seaside Heights businesses and their employees?

Is MTV paying any taxes to New Jersey as a result of the show at all?  If they hadn’t produced the show, they certainly would not have paid any taxes.  If the tax credit induced them to produce the show, that is what it was designed to do.

“I can’t believe we are paying for fake tanning for ‘Snooki’ and ‘The Situation’, and I am not even sure $420,000 covers that,” said Assemblyman Declan O’Scanlon (R-Monmouth). “This is a great investment for the taxpayers, as if they can make a show called ‘Jersey Shore’ anywhere else.”

Declan obviously doesn’t watch the show either.  They can make a show called ‘Jersey Shore’ in Italy.

Boardwalk Empire, the HBO hit series about the history of Atlantic City is not shot in New Jersey.  The beach scenes are shot in Coney Island, New York.

The Jersey Shore tax credit made headlines because State Senator Joe Vitale and the Italian American ONE Voice Coalition’s moral sensibilities are offended by how Italian Americans are depicted on the show.  They called for Governor Christie to veto the tax credit.  Christie doesn’t have the authority to veto the tax credit.  Vitale should have known that.  He probably did know that and just wanted to get his name in the papers.  What he did instead was generate more free publicity for the show he says offends him.

Vitale and ONE VOICE might have better luck in the courts. Earlier this week the Appeals Court set public moral sensibilities as a standard for what is legal in New Jersey.  If Vitale can convince a judge that the public’s moral sensibilities are offended by Jersey Shore, maybe he can get the show shut down, or get it moved, along with all the economic activity it is generating, to Italy or New York.

Posted: September 16th, 2011 | Author: | Filed under: Economy, Jersey Shore | Tags: , , , , , | 12 Comments »