New York is poised to dramatically increase its film tax incentive from $420 million a year to $700 million, as it looks to stave off competition from New Jersey and Georgia.
Gov. Kathy Hochul announced an agreement Thursday night on a $229 billion budget, after weeks of negotiations with state lawmakers.
Among many other provisions, the budget will increase the size of the film tax credit program, as well as raise the credit percentage from 25% to 30%, bringing it in line with rival states. The program will also be extended to 2034, according to a source familiar with the conceptual agreement.
The agreement with lawmakers will allow productions to receive a tax credit on above-the-line costs salaries for actors, directors, writers and producers. The state previously offered credit only for below-the-line costs. The above-the-line costs will be capped, though it is not yet certain at what level.
Hochul first proposed the increase in February. The increase was supported by the Motion Picture Association and entertainment unions, as well as film commissioners around the state and soundstage owners in New York City. Some said they have noticed that soundstages are not as full as they used to be.
Jersey certainly is trying to lure the business, said Doug Steiner, chairman of Steiner Studios. I have vacant stages for the first time in many, many years.
Hochuls predecessor, Andrew Cuomo, reduced the New York credit from 30% to 25% in 2020. New Jersey offers a credit that can range from 30% up to 39%, with incentives for diversity hiring.
We are going back to the days where productions come here to shoot exteriors, and theyre shooting the interiors in highly tax-incentivized states, said Deirdra Govan, a costume designer and vice president of United Scenic Artists Local 829. The stages are empty. Its definitely a slowdown.
New York City is a natural home for police procedurals, including Law Order, Blue Bloods and FBI: Most Wanted.
Kwame Amoaku, the deputy film commissioner in New York City, said that if the state can compete on an even playing field, then well win.
In conversations with above-the-line people, they would rather be here than in Georgia, Amoaku said. A lot of them live here. If they have a choice between working here or out of town, theyd rather work at home.
According to a report commissioned by Empire State Development, about 90% of the credit went to New York City-based projects in 2019-20, while the remaining 10% went to projects upstate.
The program includes a 10% bonus for labor costs incurred upstate, and many of the programs biggest backers are from upstate, including Hochul, who is from Buffalo.
We want to stay competitive, particularly in upstate, said Assemblywoman Didi Barrett, who is from the Hudson Valley. Its a really beautiful part of the state. But thejobs have not rebounded in the way they have in other parts.
Debby Goedeke, the film commissioner in Albany, said that productions are drawn to her citys architecture and its ability to stand in for other places. The state office buildings can double for Washington, D.C., as they did on HBOs Succession.
The Gilded Age was shot in Albany, as was Salt, the Angelina Jolie action film.
Its a heck of a lot easier to shoot an action scene on I-87 than it is in New York City, Goedeke said.
Buffalo also boasts an Art Deco-style City Hall that appeared in Nightmare Alley and Marshall.
Tim Clark, the film commissioner in Buffalo, said that he got to know Hochul when she was lieutenant governor, and that she understands the importance of the film credit for upstate communities.
She is committed to the film industry, he said. She understands the enormous impact is has on places like Buffalo, Albany, Syracuse, Rochester, Binghamton. Those are places that never had production before.
The increase has drawn criticism from some policy research organizations, who argue that the state is subsidizing private companies without a true public purpose.
Anyinterrogation of the numbers shows that its a mistake for the state to be at the current level, to say nothing of going to $700 million, said Ken Girardin, a fellow at the Empire Center in Albany. Letstalk about the tradeoffs. Tell me how many services you dont want to offer because youre afraid Tom Selleck is going to go film in Newark.
John Kaehny, executive director of Reinvent Albany, said that the program works out to $66,000 in taxpayer funding per film job created. Thats three times the per-job cost of the subsidy for Amazon HQ2 project, which the state ultimately scrapped, he said.
This is the biggest, by far, industry-specific corporate giveaway that New York has, Kaehny said. Theres nothing remotely close.
But lawmakers have put a high priority on attracting the film business and keeping it in the state. And when film commissioners talk to studio executives, they come away with a clear understanding that tax credits are essential to staying competitive.
In the old days, they went where the scenery was, said Clark, the Buffalo film commissioner. Now, they go where the money is.