Does Jim Geraghty Understand Marketing?

Jim Geraghty has penned an article criticizing Governor Palin for a law she signed in 2008 that offers tax breaks to film companies who do business in Alaska. Geraghty states that the production company for “Sarah Palin’s Alaska” took part in the program and that it might be “problematic” for the governor “on the campaign trail.”

He writes:

It isn’t too hard to imagine this becoming problematic for Sarah Palin on the campaign trail, as noted by the Tax Foundation:

In case you missed it, small government crusader and Tea Party favorite Sarah Palin’s TLC reality show “Sarah Palin’s Alaska” received a $1.2 million subsidy from the state of Alaska. The show spent $3.6 million on production in the state, meaning that Alaskan taxpayers covered a third of the cost of the show. The show will apparently not have a second season.

Everything Palin has done has been perfectly legal, but it looks problematic for a crusader for small government to end up collecting a seven-figure paycheck from an endeavor that received a seven-figure subsidy, all set up by a program she signed into law. Of course, Palin set up the subsidy in 2008, and the TLC series wasn’t filmed until the summer of 2010, after Palin resigned as governor.

Which begs the question…. What’s the problem?

If Governor Palin signed a law in 2008, and somebody she had a business agreement with took advantage of that law in 2010 (while she was no longer in office), where is the issue? Governor Palin was not in charge of the show’s production. Any decision by her was made well before she even considered doing her own show. The decision to take the tax break from the state, was not made by her, but by the production company.

I think Geraghty realizes that there is nothing to say Governor Palin did anything wrong regarding this, so he quickly changed direction in his piece by adding this update:

Alaska may be unique, in that the revenues from petroleum enable it to enjoy no state sales tax and no individual income tax, the lowest individual tax burden in the country. Oil revenues have meant that the state enjoys better budgetary circumstances and lower unemployment than most other states. So a conservative may argue that in an era of a $1.6 trillion annual federal deficits, federal funding for PBS, NPR, the National Endowment for the Arts and National Endowment for the Humanities may be unaffordable luxuries, while finding no particular problem with the state of Alaska choosing to pay millions to subsidize television programming that they believe promotes the state’s image and attracts tourism dollars.

Still, should governments be in the business of subsidizing television programs? The precise arguments against PBS and NPR – that in today’s much more diversified media environment, almost all of the programming on government-funded radio and television networks could thrive in the private sector without government subsidy – would apply to the Alaska-based shows, no?

My first issue with Geraghty’s argument here is that he blurs federally funded programs with state-run programs. While I do take issue with the federal government funding programs that bring little to no return (fiscally speaking) I have no objections with states creating their own programs that they believe could benefit themselves.

Alaskans understand that tourism is an important arm of their overall economy. The cruise industry alone, brings over $1 billion to Alaska’s economy annually. The program that Governor Palin signed into law allocated $100 million, which it has only spent a fraction of up to this point. In my view, these tax incentives offered to the film industry – in a state as beautiful as Alaska – are akin to marketing expenses any business is familiar with.

An AP article from February states:

The real Alaska has finally joined the A-list.

Long a bit player in the entertainment world, the 49th state increasingly is sought out by TV and film producers for its unmatchable lure of spectacular beauty and peril, of wild adventures and dangerous jobs.

And they’re actually shooting in the nation’s largest and most remote state instead of locations dolled up to portray Alaska, as multiple projects have done.

Alaska’s new film production tax credit program has only ramped up the state’s evolving Q quotient, attracting several dozen projects since it was launched in 2008.

“People are curious about Alaska. They’re curious about Alaskans. They’re curious about Alaska jobs,” said Alaska Film Office manager Dave Worrell.

Most of the productions are based in TV reality: “Deadliest Catch,” “Ice Road Truckers,” “Gold Rush Alaska,” Alaska State Troopers,” “Flying Wild Alaska” and, of course, the recently concluded special eight-part series, “Sarah Palin’s Alaska,” to name a few.

There also has been a noticeable uptick in interest from feature filmmakers – where the big money is.

A major production starring Drew Barrymore, “Everybody Loves Whales,” and a supernatural thriller starring Jon Voight filmed in Alaska last year, adding to a trickle of feature films over the years with actual footage in Alaska.

So, essentially the Alaska state-run program will go above and beyond just promoting Alaska as a tourist destination. With larger productions taking interest, the program has opened the doors to an entirely new industry.

I think Jim Geraghty has an issue with the government providing tax incentives to the entertainment industry because it’s the entertainment industry. Otherwise, I’m sure he would be penning articles decrying energy subsidies in Texas, and tech subsidies in Tennessee, right?



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