Industryites rally at public news conference
Thesps, crew members, studio facility owners and other Gotham showbiz players braved the snowstorm that blanketed the city Monday to publicly urge Gov. David Paterson to save the state’s production tax incentive program.
The news conference was held at Kaufman/Astoria Studios to sound the alarm that the state will lose jobs and tax revenue if the budget pending in Albany is approved without an allocation for the production tax credits. The budget recently submitted by Paterson has no new funds earmarked for the program that has been around, in one form or another, since 2005.
“The production tax credit is demonstrably the most effective job-creation program in the history of the state,” said former Screen Actors Guild prexy Richard Masur. “It has generated thousands of high-quality union jobs.”
The newser was held on the set of ABC drama “Life on Mars,” a program that relocated to Gotham to take advantage of the credit program. Despite the chilly weather and 10 inches of snow on the ground, the event was well attended by filmmakers, thesps and crew, though the turnout by reporters was a little sparser than organizers had hoped.
“I’d rather do all my work here, except on days like today,” joked “Life on Mars” co-star thesp Michael Imperioli. Imperioli and his co-stars Harvey Keitel and Jason O’Mara all spoke in favor of the tax incentive program, though their salaries are exempt from the break that gave producers a 30% refund on state and city taxes generated from below-the-line expenditures.
Supporters of the tax credits say the state’s $14 billion deficit should have no bearing on the program because it has proved to more than pay for itself in additional production spending and jobs brought to the city.
At the newser, supporters passed out an Ernst & Young study documenting that film and TV production in New York will generate about $2.7 billion in tax revenue between 2005 and the end of the state’s 2009-10 fiscal year. Of that $2.7 billion, about $685 million has been earmarked for refunds. Producers cannot receive the refunds until long after the production dollars have been spent. The study estimates that the program has aided in the creation and retention of 19,512 jobs.
Still, at a time of fiscal crisis for the Empire State, Paterson and other lawmakers may be wary of appearing to hand out breaks to film and TV productions, especially those from such media giants as Disney and NBC Universal, at a time when New York is cutting costs at schools and closing hospitals.
“This program more than pays for itself,” said Mary Rae Thewlis, a unit production manager for USA Network’s “Law and Order: Criminal Intent,” another beneficiary of the program. “This is not charity. It generates revenue at a time when the state is desperately in need of money.”
Since its inception, the program’s spending has been capped so that lawmakers could study the program’s impact on job creation and tax revenues. The latest authorization of funds, instituted in April, was increased dramatically to $460 million, which was projected to last through 2013. But those funds were allocated in less than 10 months thanks to a massive influx of film and TV productions looking to take advantage of the credit.
Silvercup Studios CEO Alan Suna argued lawmakers have proof that the program more than pays for itself and should be allowed to continue without a cap. There’s precedent for such a program — the state’s Industrial and Commercial Abatement Program provides tax breaks for commercial construction and has no cap.
“As another one of our industries — finance — is having trouble, we need to rebuild this one,” said Sam Freed, prexy of SAG’s New York branch.
Still, there is resistance to removing the cap on the film production credit, most of it coming internally from budget watchers. Empire State Development Corp. prexy-CEO Marisa Lago has pitched a number of options to trim back the credit, including cutting the percentage of taxes to be refunded from 30% to 20%; instituting a hard cap that would limit the total amount of refunds for all productions to $100 million each year; and ensuring that refunds would be distributed evenly between indie productions, big-budget features and TV skeins.
California lawmakers have sought to fight the flow of production outside its borders by approving a production tax incentive program that has a $500 million cap. That program begins in July. But Suna dismissed the idea that it would be around long enough to pull production away from New York: “That money will be gone in two weeks,” he predicted.