Tania Dall / Eyewitness News
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NEW ORLEANS -- The film industry is still booming in Louisiana creating jobs and boosting the local economy.

But a new study says tax incentives for movie makers are hurting the state financially.

Film crews are constantly setting up shop across New Orleans. On Wednesday night their sights were set on Natchez Street in the Central Business District.

'Now we have Hollywood South in Louisiana. The epicenter is New Orleans. We wouldn't have that if we didn't have these tax credits,' said state Rep. Austin Badon, D-New Orleans.

A decade ago, state lawmakers passed a law that essentially pays movie producers to make films in Louisiana.

Now a Baton Rouge-based budget group says that the tax credits are hurting and not helping the state.

'The money we pay out is far greater then the amount we get back in return. It's a big expense. This is real money. This is money we could otherwise be spending on education, on health care, on cops and firefighters, on roads and bridges,' said Jan Moller, director of the Louisiana Budget Project.

A newly released report by LBP says that tax payers shelled out about $60,000 for every direct film industry job that has been created. The group believes the tax program needs to be scaled back.

'There have been nine states in recent years that have either gotten rid of their film tax credit program or put some sort of restrictions in place because they found the same thing we found in our study. These subsidies can quickly grow out of control and crowd out other priorities of state government,' added Moller.

However, there is positive economic news. The city of New Orleans says the film industry spent $531 million in 2011 during both filming and post-production. The city says these productions rent office space, hotel rooms and buy materials to build their sets locally. They also pay permit fees for use of public rights of way and buildings and have crews that eat and shop locally.

Badon agrees that film industry tax incentives have been a positive economic engine creating jobs and revenue that he believes wouldn't exist today.

'It's a flourishing industry. It's an industry that we have to promote because it employs so many people,' said State Rep. Badon.

The Louisiana Economic Development secretary has gone on the record saying that the state is now number three in the country in film production activity.

Secretary Stephen Moret adds that the Jindal administration would only support changes to the film tax program that strengthen it.

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