Florida’s Model for Renewable Energy Subsidies Goes Bankrupt
Digital Domain Media Group, Inc. closed its taxpayer-subsidized film studio and filed for bankruptcy protection, just a few short months after State Rep. Scott Plakon (R-Longwood) told skeptical Tea Party leaders the Florida film industry is a sterling demonstration of why government officials should hand over taxpayer dollars to politically connected renewable energy companies.
$135 Million Wasted
Between 2009 and 2012, Florida’s Republican-dominated legislature and various local governments handed over $135 million in taxpayer subsidies to Digital Domain. Those subsidies included prime real estate and a lavish headquarters building in addition to direct cash payments.
Role Model for Subsidies
In an April conversation with Tea Party leaders unhappy about legislation giving renewable energy companies $100 million in taxpayer subsidies, Plakon said state subsidies for film companies such as Digital Domain show why it is good for government to generously subsidize companies and industries.
“Plakon offered examples of other tax credits being used successfully in the State of Florida to create jobs and boost our economy—namely the film industry,” wrote Tea Party leader Carol Knighton of The Villages in an April 26 email to other Tea Party leaders.
In his conversation with Knighton and other Tea Party leaders, Plakon strongly objected to Tea Party leaders comparing Plakon’s renewable energy subsidies with the federal Solyndra scandal. When Plakon tried to distinguish his Florida-specific renewable energy subsidies from the federal government’s Solyndra debacle, Tea Party leader Norm Knighton said government should not be handing out subsidies in any form. Plakon then trumpeted state subsidies for film companies as a success story that should serve as an example for subsidies for the renewable energy industry.
In his conversation with Knighton, Plakon said taxpayer subsidies for film companies “encourage investments,” “create jobs,” and “boost our economy.”
Despite Plakon’s assertions, Digital Domain abruptly laid off approximately 300 Florida workers and returned none of the $135 million in taxpayer subsidies.
“The failure of Digital Domain, in particular, shares some of the same traits of the failed solar-panel manufacturer Solyndra, which received $535 million in federal loans before closing its doors and filing for bankruptcy in 2011,” the Tampa Bay Times reported.
At $135 million spread out over just 7 million Florida households, the Digital Domain bankruptcy cost the average household nearly four times more than the Solyndra bankruptcy. Solyndra milked taxpayers out of $535 million, but that money was spread out over 100 million U.S. households.
Scott to Clean Up the Mess?
In April of this year, Plakon and Agriculture Commissioner Adam Putnam applied immense pressure on Gov. Rick Scott (R) and convinced him not to veto Plakon’s renewable energy subsidies. Key to Plakon and Putnam’s argument was the assertion state government subsidies for the renewable energy industry would encourage investments, create jobs, and boost the economy, as Plakon claimed they do in the Florida film industry.
Responding quickly to the Digital Domain bankruptcy, Scott has ordered an investigation into the scandal.
James M. Taylor (email@example.com) is Managing Editor of Environment & Climate News.