The state of New York plans to raise its film incentive to $700 million.
New York plans to increase its film tax incentive from $420 million annually to $700 million in response to New Jersey and Georgia competition.
On Thursday night, Gov. Kathy Hochul revealed a $229 billion budget deal reached after weeks of discussions with state lawmakers.
The budget includes increasing the size and credit percentage of the film tax credit program to match the standards of other competing states. This is among several budgets. According to a source familiar with the conceptual agreement, the program’s extension will continue until 2034.
Lawmakers have agreed to provide tax credits to productions on above-the-line costs, including salaries for actors, directors, writers, and producers. In the past, credits were only given for costs categorized as below-the-line. There will now be a limit on the amount of credit that can be given for above-the-line costs, although the exact limit has yet to be determined.
In February, Hochul proposed an increase that received support from the Motion Picture Association, entertainment unions, film commissioners across the state, and soundstage owners in New York City. Some people have observed that soundstage occupancy has decreased compared to the past.
“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.”
In 2020, the New York credit was reduced from 30% to 25% by Andrew Cuomo, Hochul’s predecessor. On the other hand, New Jersey has a distinction that may vary between 30% to 39% and also offers incentives for diversity hiring.
“We are going back to the days when productions come here to shoot exteriors, and they’re 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. It’s a slowdown.”
Police procedurals like “Law & Order,” “Blue Bloods,” and “FBI: Most Wanted” are often set in New York City.
According to Kwame Amoaku, the deputy film commissioner in New York City, if the state can have an equal opportunity to compete, then they will come out as winners.
“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, they’d rather work at home.”
A report commissioned by Empire State Development shows that 90% of the credit was allocated to projects in New York City during 2019-20, while the remaining 10% was allocated to upstate projects.
The program offers a 10% bonus for labor costs incurred upstate. Several supporters of the program, including Hochul from Buffalo, are from upstate.
“We want to stay competitive, particularly in upstate,” said Assemblywoman Didi Barrett, who is from the Hudson Valley. “It’s a great part of the state. But the jobs have not rebounded in the way they have in other parts.”
According to Debby Goedeke, who serves as the film commissioner in Albany, productions are attracted to the city’s architecture and its potential to substitute for other locations. For instance, the state office buildings were replaced for Washington, D.C., in HBO’s “Succession.”
“The Gilded Age” was shot in Albany, as was “Salt,” The action film starring Angelina Jolie.
“It’s a heck of a lot easier to shoot an action scene on I-87 than it is in New York City,” Goedeke said.
In addition, Buffalo has an Art Deco-style City Hall featured in the films “Nightmare Alley” and “Marshall.”
According to Tim Clark, the film commissioner of Buffalo, he became acquainted with Hochul during her time as lieutenant governor and believes that she recognizes the significance of the film credit for upstate regions.
“She is committed to the film industry,” he said. “She understands the enormous impact is has on places like Buffalo, Albany, Syracuse, Rochester, and Binghamton. Those are places that never had production before.”
Some policy research organizations have criticized the increase, stating that the state is providing subsidies to private companies without real public purpose.
“Any interrogation of the numbers shows that it’s 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. “Let’s talk about the tradeoffs. Tell me how many services you don’t want to offer because you’re afraid Tom Selleck will go film in Newark.”
According to John Kaehny, the executive director of Reinvent Albany, each film job created with the program costs $66,000 in taxpayer funding. This amount is three times higher than the per-job cost of the subsidy given to the Amazon HQ2 project, which was later canceled by the state.
“This is the biggest, by far, industry-specific corporate giveaway that New York has,” Kaehny said. “There’s nothing remotely close.”
The state places great emphasis on attracting and retaining the film industry. Film commissioners have conversed with studio executives and have concluded that tax credits are crucial for maintaining competitiveness in this industry.
“In the old days, they went where the scenery was,” said Clark, the Buffalo film commissioner. “Now, they go where the money is.”
