As part of the $175.5 billion budget deal struck during a weekend of negotiations at the start of April, Governor Andrew Cuomo and the Democratic-controlled legislature approved $840 million in refundable credits for television and movie producers over the next two fiscal years. The state has already handed out $7.3 billion of incentives to the industry since 2004, according to the Citizens Budget Commission. The sum is “twice as much as Amazon would have gotten and they would have created 25,000 jobs.”
The glamour of Hollywood has long exerted an allure over officials in U.S. states, more than half of which actively subsidized production last year. In the case of New York, the two-year extension underscores the persistence of government aid to industries that are generous political patrons or haven’t antagonized labor unions, as Amazon did. New York Democrats and Republicans have collected millions of dollars in campaign contributions from Hollywood moguls like Steven Spielberg and Jeffrey Katzenberg, as well as from media companies and New York City film studios. In 2018 alone, Cuomo received more than $150,000 from the TV and film industry, according to campaign finance records. Democratic Party committees got at least $209,500, while Republican Party committees received at least $88,000.
Cuomo, historically a strong supporter of the film tax credits, didn’t include them in his executive budget, though they were part of the final agreement.
Established in 2004 with $25 million, the program was expanded to $420 million annually in 2010, one year before Cuomo took office, and is among the most generous film-incentives offered by U.S. states. The program was expanded further under Cuomo to cover relocated talk or variety shows and an additional 10% credit was given for certain upstate counties. New York’s program allows companies to recover as much as 40% of costs on eligible production and post-production expenses, excluding spending on actors, directors, and writers.
Since Cuomo took office, the credits have generated an estimated $24.5 billion in spending, according to the Empire State Development Corp.
New York officials say the incentives have brought jobs and investment that would have gone elsewhere, supporting “hundreds of thousands” of caterers, production assistants and other workers, said Adam Kilduff, a spokesman for the Empire State Development Corp. Television and film-related jobs increased to 48,490 in May 2018 from 25,170 in May 2004, according to Bureau of Labor Statistics data.
“The film tax credit program has proven to be a worthwhile investment, generating thousands of jobs and billions of dollars each year and, much like the tax credits that would have supported Amazon’s expansion in New York, the program increases our ability to compete with other states,” Jason Conwall, a Cuomo spokesman, said in an email.
Source: Crain’s New York Business