Organization pitches stripped-down version
Empire State Development execs are hoping to salvage New York’s depleted Empire State Film Production Tax Credit program by floating a number of options, including scaling back the amount of incentives offered to bring film and TV productions to the state.
Local businesses and unionized Gotham crew members are set to hold a news conference this afternoon at Kaufman/Astoria Studios, where New York state AFL-CIO prexy Denis M. Hughes will urge Gov. David Paterson to replenish New York’s production incentives program, despite the state’s larger budget woes. The production credit is good only for below-the-line expenses, so local crews and businesses have the most to lose should the incentives program be eliminated.
Empire State Development prexy Marisa Lago pitched one scenario, a stripped-down version of the tax credit program, to the business org Assn. for a Better New York at a breakfast meeting Thursday at the New York Hilton.
The program would be reduced from offering producers a 30% refund on taxes associated with below-the-line costs to a 20% break, and the total amount of refunds would be capped at $100 million a year, Lago suggested. The revised program would also be evenly distributed among TV, feature and indie film productions.
Lago also suggested a 5% bonus for productions shooting outside Gotham, balancing out Mayor Michael Bloomberg’s 5% bonus for shooting within the city limits — an idea that owners of studio facilities found attractive because Gotham became saturated with productions as soon as the credit was expanded last April.
Last year’s expansion of the program blew through a new $460 million in refunds, to be paid out in the future after the production dollars are spent, in 10 months at the most.
Gotham industryites maintain that the state’s budget crunch should have no bearing on the tax credit program, since it’s funded exclusively by taxes on film and TV productions that are paid well in advance of the tax refunds being issued.
“You’re creating the jobs and receiving the tax revenue at no cost to the state for the first two to three years,” said Silvercup prexy Stuart Suna. “For every dollar you spend in New York City and New York state, the city and state receive back $1.90.”
Today’s news conference will take place on the set of ABC’s “Life on Mars,” a show that was rewritten in order to shoot in Gotham and take advantage of the credit.
“We are committed to this vital industry and are working to ensure that New York remains in front of the cameras,” Lago said in a statement. “We are working on crafting a reformed tax credit proposal that will keep this vibrant and job-producing industry thriving in New York while at the same time recognizing the state’s budget realities.”
The final word on the credit is Paterson’s. With New York facing a $14 billion budget deficit, the governor may have trouble supporting an open-ended program that ran through what was supposed to be five years’ worth of tax credits in 10 months.
Studio owners warn that New York has become a much less attractive place for production since the maximum amount of refunded tax dollars was reached.
“Features are not even budgeting New York right now,” said Steiner Studios prexy Douglas C. Steiner, who helped design the program. “Anybody who’s not already in line for a tax credit and doesn’t have a place to go isn’t looking at New York because they can’t risk not getting one.”
Warner Bros. TV has already made plans to move Fox’s hit frosh series “Fringe” from New York to Vancouver.
The clock is ticking on the New York incentive program’s ability to retain and attract TV shows, pilots and films. California’s just-approved 20% tax incentive will take effect in July, and that program offers a 5% sweetener to attract runaways from other states.
“I think if we can get it in the budget and have the budget in place (by May’s network upfronts), we’ll be set,” Steiner said.