A new study released on Monday by the Motion Picture Association of America shows further evidence that New York State’s tax incentive program for film and television productions has been a boon not just to the entertainment industry but the entire state.
The study, conducted independently by consulting firm HR & A Advisors, shows that the tax credit supported 28,900 jobs across all industries in New York State last year. That includes 12,600 jobs directly associated with productions as well as 16,300 in related businesses such as hospitality and retail. In all, the incentive program has generated $6.9 billion in economic spending and $4.2 billion in personal income to the New York state economy, according to the study.
New York state’s production tax credits began in 2004 as an attempt to combat runaway production and lure movies and TV shows back to the state. The program offers up to 35 percent tax credits for qualified production companies that film in the state.
Despite being widely popular, the program has its share of detractors, most vocally the Washington, D.C.-based research group the Tax Foundation, which has criticized it as a form of corporate welfare.
In June, Elizabeth Malm, a research assistant for the foundation’s State Policy Team, told the IBTimes that the state government has tried to sell New Yorkers on the notion that tax breaks lure productions to the state when in fact they “would have done business there anyway.”
Some industry workers are also against the program, as well as similar programs in states across the country. Occupy VFX, a group of anonymous visual effects artists, argued on its website that tax subsidies have made the entertainment industry too nomadic, forcing below-the-line workers to follow production companies from state to state as producers “race to the bottom” in search of sweeter tax breaks.
However, in terms of the benefit to New York’s production industry, numbers from HR & A’s and other studies are hard to dispute. In 2004, the year the program was launched, there were nine prime time TV series shooting New York City. Today, there are 23, according to the Mayor’s Office of Media and Entertainment. Those shows include longtime staples such as NBC’s “Law & Order: Special Victims Unit” and “30 Rock,” as well as newcomers like CBS’s “Blue Bloods” and FX’s “The Americans.”
The increase is reflected in the busy studios and back lots along Brooklyn’s waterfront. Steiner Studios, one of the largest, recently announced an expansion. Moreover, the HR & A study shows that, for every dollar in tax credits distributes, it takes in $2.23 in taxes -- an impressive return on investment, according to Sen. Chris Dodd, who serves as chairman of the MPAA. “These findings further confirm that the New York state production incentives have grown into a major economic driver in the state’s economy,” Dodd said in a statement.
And that economic driver couldn’t come at a better time. Since the onset of the economic downturn in 2008, private sector employment has declined 1.6 percent in New York. Conversely, the state’s production industry has grown an impressive 25 percent during that same period.
The full results of HR & A’s study are available on the MPAA website.