Legislators free up $350 mil for film production
NEW YORK — New York’s production community can breathe a temporary sigh of relief: State lawmakers have voted to extend the Empire State’s successful film and TV production tax credit program.
Legislators and Gov. David Paterson agreed in Albany over the weekend to allocate another $350 million in tax credits for the state’s film production tax incentive program. The initiative has strict limits on the dollar amount of tax refunds productions can receive.
But television productions may have a hard time justifying filming series in New York, given that the credit is not open-ended.
The governor’s office grossly underestimated the appeal of the program last year when it approved a $480 million expansion that was designed to last through 2013. That drew so many new productions to the state that the $480 million was spoken for in about 10 months.
Proponents of the incentives have argued the program more than pays for itself by attracting new productions to the state that still pay out far more overall in local and state tax coin than they receive in refunds through the program.
Industryites expressed gratitude for the extension (the program’s coffers have officially been empty since Feb. 5), but annoyance at its temporary nature.
“The math here is what’s really saddening,” said Silvercup Studios prexy Stuart Suna. “The state and the city combined make $1.90 (for every dollar invested) two to three years in advance of (paying) any refunds. And they don’t understand that. They look at it as a budget expense. They don’t account dollar for dollar.”
Those who pushed to keep the program alive have asked that limits on the refunds be removed, bringing it in line with most other states’ tax incentive programs.
“Why wouldn’t you have an uncapped, permanent program when that’s what you’re competing against?” asked one film exec. “In less than a year, instead of writing credit checks, the state’s going to be writing unemployment checks.”
Added Vans Stevenson, senior veep of state legislative affairs for the MPAA: “We’re pleased that the credit has been extended and disappointed that it’s not a multiyear program, and we’re hopeful that the governor and the legislature will consider revisiting the program before the end of the legislative session.”
Television productions in particular may be hamstrung by the limits of the credit, since they’ll have no idea how much money will be expended on their shows after this year (most studios want to know how much a show will cost for three years before approving a location). Facility owners and union reps point to TV productions in particular as the lifeblood of the New York entertainment industry.
“The impact isn’t just to production; it’s to ongoing development,” said Kaufman/Astoria Studios prexy Hal Rosenbluth.
“I’m building a new stage, which I will continue to do. But would I make that decision again if I had to make it today? Probably not. It’s not like they’re picking up and leaving, but I lost ‘Life on Mars,’ (which was canceled March 2) and I’m going to have a hard time replacing it.”
Rosenbluth said that other states are eager to poach New York’s film- and TV-related businesses if the credit situation worsens. “I’ve been approached by other states to come and develop in their neck of the woods,” he said. “I don’t want to do that, but someone will.”