New York Aims to Reverse Production Decline by Sweetening Tax Credits

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I proposed a variety of enticing incentives for the New York film and TV industry on Tuesday, aiming to counteract a significant drop in production within our state.

Governor Hochul has put forth a proposal to establish a $100 million fund dedicated to financing independent films. Furthermore, she offers a 10% additional incentive on top of the standard 30% tax credit for companies that undertake at least three major film productions within the state.

As a passionate film enthusiast, I’ve noticed some intriguing trends in New York’s film production landscape. The state’s development office has forecasted a 15% decrease in production spending since 2019. Interestingly enough, applications for the state tax credit have plummeted by an alarming 53%, compared to five years ago. Despite this, the state has almost doubled the annual cap for the tax credit from $420 million to $700 million in 2023. This suggests that while incentives are becoming more generous, they may not be enticing enough to attract the same level of production as before.

Over the past few years, there’s been a significant decrease in production not just in the U.S., but also in Canada and the U.K., due to studios scaling back because of the financial realities of streaming. This reduction in output has made it hard for many film crew members to find employment, leading some politicians to attempt revitalizing production within their regions.

As a movie enthusiast, I’m sharing some exciting news: Governors in California and British Columbia are planning significant expansions of their film industry tax incentives! In California, Governor Gavin Newsom is considering an increase to $750 million annually, hoping to keep pace with New York. Meanwhile, over in British Columbia, they’re aiming for a boost of approximately CAD 1.2 billion or $843 million, responding to a noticeable slowdown in their film sector. These moves are designed to attract more productions and maintain our shared love for cinematic magic!

From my perspective as a movie critic, I must admit that New York finds itself in a heated battle with its neighboring state, New Jersey. The allure of New Jersey lies in the generous film incentives it offers, reaching an impressive 39% reduction in production costs.

2023 saw me, a New York-bred movie enthusiast, cheering as my city boosted its credit from 25% to an exciting 30%. This change was particularly thrilling for the creative minds behind the scenes – actors, directors, writers, and producers – as it made their first $500,000 of salary eligible for these tax incentives.

However, the studios didn’t stop there. They lobbied hard, and Hochul listened. Her new proposal aims to eliminate that cap on eligible income, bringing New York in line with neighboring New Jersey and other film-friendly states. This move could potentially attract even more blockbuster productions to the Empire State!

Another concern is the length of time it takes to receive the credit benefits. For certain projects, credits are distributed over a two-year span, while for larger ones, they’re spread out over three years. However, Hochul’s proposition aims to expedite this process, granting the full credit in the very first year of allocation instead.

Due to high demand, the program has more applicants than it can accommodate, resulting in a buildup of pending requests and forcing the state to use funds allocated for future years to finance current projects.

The significant hold-up predominantly impacts small-scale film and TV productions. To tackle this issue, Hochul’s office has suggested establishing a $100 million fund exclusively for low-budget movies and series. This money will be distributed on a priority basis to those who apply first.

The Motion Picture Association, an organization that advocates on behalf of the seven leading film studios, commended Governor Hochul in a statement, labeling her as a “strong advocate for New York State’s artistic and creative sector.

The MPA stated that when films or TV shows are produced in cities and towns like Yonkers and Buffalo, it leads to the creation of good-paying, skilled jobs for local residents and boosts local businesses. In essence, a major film adds approximately $1.3 million daily to a community’s economy, while a TV series injects around $475,000. The governor’s plan today aims to improve the production incentive program, which will continue our industry’s success in generating union jobs, fostering talent, and supporting small businesses.

Senator James Skoufis, a Democrat from Hudson Valley, has been vocal about his criticism towards the film incentive program. He often points out a 2023 state audit revealing that for every dollar invested, it yields only 31 cents in tax revenue. Last year, at a press conference, he advocated for the abolishment of this credit, although he admitted that such a move might not be feasible.

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2025-01-22 03:17