Anti-Abortion Legislation Gives Some States A Case Of 'Bathroom Bill' Economic Deja Vu

North Carolina took a nearly $4B hit to its economy when companies and tourism-generating events left the state after it passed anti-LGBT legislation in 2016. Three years later, other Sun Belt states seem to have missed the lesson in business and politics. 

Georgia, Kentucky and Mississippi have passed similar bills this year where abortion is banned once a heartbeat is detected. Arkansas and Utah have passed bills banning abortion after 18 weeks of pregnancy. Alabama passed the strictest ban, outlawing the procedure entirely with few exceptions. 

Businesses have cautioned the legislation would impede their ability to recruit female talent and that they would have to look to other states for future growth if the bills became law. 

Netflix vowed Tuesday to fight alongside the American Civil Liberties Union in court against the “heartbeat” abortion bill Georgia Gov. Brian Kemp signed into law in May. Disney CEO Bob Iger said Wednesday it would be difficult to continue filming in the state if the law, which bans abortions as early as six weeks, goes into effect as planned in 2020.

Other film studios, like AMC, CBS, NBCUniversal, Sony, Viacom and WarnerMedia, have also come out against Georgia’s abortion bill. 

“The reality is businesses these days are in a much different position than they ever have been,” said Robert Foehl, executive in residence of business law and ethics at the Ohio University College of Business. “With that comes not only power, but also responsibility.” 

Georgia has become Hollywood South — because the state’s film tax credits aren’t capped, it has become one of the most popular places in the world to produce a movie or television show. 

The Peach State awarded $800M in film tax credits in 2018, exceeding California, and is now where hit shows like “The Walking Dead” and “Stranger Things” are filmed as well as movies like “The Avengers" series.

Louisiana has also become a popular location for filming and was home to $148M in direct spending by film teams in 2018. The state passed an abortion ban bill like Georgia’s last week. 

While some may question why film studios would risk biting the subsidy hand that feeds their next box office hit, Foehl said companies in 2019 must answer to all stakeholders — not just shareholders motivated by profit margins.

“Stakeholders aren’t just shareholders. They’re often employees where some of these decisions are being made,” he said. “You couple that with consumers increasingly doing business with the companies who best line up with social issues that most concern them, and that’s the environment we find ourselves in.”

Companies taking on a greater interest in social politics has been a long time coming, said Foehl, the former director of corporate compliance and ethics for Target.

Critics may say companies garnered too much political influence because of the U.S. Supreme Court’s Citizens United decision, which granted corporations unlimited political spending power. While that decision pleased conservatives, corporate citizenship has since benefited the liberal end of the political spectrum, too. 

After North Carolina passed HB2, the infamous “bathroom bill” that forced transgender people to use the bathroom matching the gender on their birth certificate, it was estimated to cost the state nearly $4B. 

PayPal nixed plans for a Charlotte global operations center, which was expected to add $2.7B to the state economy. Deutsche Bank paused expansion plans at a Cary, North Carolina, office. The NCAA and the NBA avoided hosting high-profile games in the state as long as the law was on the books. Singers like Ringo Starr and Bruce Springsteen canceled performances in the state.

“You would have thought Georgia would have learned a lesson from North Carolina when they passed the bathroom bill,” University of Georgia Professor of Public and International Affairs Charles S. Bullock III said. “It isn’t just idle chatter. Businesses can and do go other places.”

Other states are hoping to capitalize on that.  

California Democratic Assemblywoman Luz Rivas introduced a bill last week to offer tax breaks to film and television productions that leave states with strict bans on abortion. 

Other states with more pro-choice legislatures like Colorado, New York and New Mexico have also begun to tout their film incentive packages to production teams looking to vacate places like Georgia and Louisiana. 

“This type of legislation does no favors for the economic development professionals operating in the highly competitive environment we live in,” said national site selection expert and The Boyd Co. principal John Boyd.

It isn’t clear if states with the newly enacted legislation will face the same economic dilemma as North Carolina. 

Bisnow reached out to large employers in the impacted states like Airbus, Daimler, Delta Air Lines and Mazda. All either declined to comment or didn’t respond to a request for comment in time for publication. 

Georgia Department of Economic Development CEO Bert Brantley said the state respects all opinions on issues where there is passion on all sides. He added the recent legislation does not impact the market fundamentals of what makes Georgia so attractive to companies and film crews. 

“Georgia continues to be the most advantageous place in the country to create compelling stories. We have crews that are trained and experienced, landscapes with incredible diversity, and studios that have housed the most successful productions in the history of film,” Brantley said via email. “You won’t find a harder-working and more knowledgeable crew base anywhere in the country.”

Companies ultimately may value that in the long-term. While states will always try and capture business from each other, Foehl said it may be harder for a state to have a viable politically based pro-business strategy. 

While California or New York can appeal to left-leaning film companies with the latest political battle, they would then be less attractive to a more conservative corporation like Chick-fil-A or Hobby Lobby. 

“I don’t know if you can put together a cohesive, comprehensive strategy to capitalize on corporations making decisions on social issues,” Foehl said. 

States have also recognized the economic impact of hard-right social legislation in the past and found ways to make choppy political waters a short-term political crisis. 

Indiana passed a religious freedom bill in 2015 that was interpreted as a way for business owners to discriminate against LGBT individuals. 

After businesses and the NCAA threatened to leave Indiana, then-Indiana Gov. Mike Pence later signed a revised version of the bill that clarified the religious freedom bill could not be used to justify LGBT discrimination. 

Former Georgia Gov. Nathan Deal vetoed a similar religious freedom bill in 2016. Campaigns to get Hollywood studios to vacate Georgia if the bill passed were part of the reasoning for Deal’s decision.

North Carolina ultimately recognized HB2 was costing it much-needed business and later repealed parts of the law. Upon signing the repeal measure into law in 2017, North Carolina Gov. Roy Cooper admitted HB2 had “stained our reputation” and done “great economic harm” in many North Carolina communities.

The NCAA and NBA have returned to the state, and the Tar Heel State even convinced Honeywell in late 2018 to move its global headquarters from New Jersey to Charlotte. 

The key factor in keeping business was repealing the law. 

“These clouds do lift,” Boyd said. “North Carolina is a great example of that.”