While New York and California struggle with budget problems, the outlook appears sunny for the film production incentive programs in both states.
New York Gov. David Paterson unveiled the proposed 2010-11 state budget on Tuesday, with painful spending cuts across the board but good news for the local film industry: The New York State film production tax credit has been renewed to the tune of $2.1 billion, or $420 million in tax refunds per year over the next five years.
And in California, Gov. Arnold Schwarzenegger announced a few hours later that the state’s approved 60 productions for its 6-month-old tax credit incentive program, with those projects generating a combined $710 million in spending during the current fiscal year ending June 30.
This is all about jobs and stimulating our economy — it’s about the caterers, the makeup artists and countless small businesses that rely on film and television production to thrive and create jobs here in California,” Schwarzenegger said. “I fought hard for these economic stimulus measures because we must do everything in our power to keep Californians on the job and our economy on the road to recovery.”
The Golden State’s program, approved a year ago, is significantly smaller and not as sweet as many others, as it offers a maximum 25% credit and a total of $500 million in credits over five years. But state officials contend the presence of Hollywood’s existing infrastructure and the desire to stay close to home has the potential to reverse more than a decade of runaway production.
California’s decision to enact the program — after years of seeing legislation get bottled up by lawmakers from outside Los Angeles — came a year after ABC skein “Ugly Betty” abandoned Hollywood for New York due to the latter’s incentives.
The New York program provides a 30% cash rebate on state taxes to eligible productions, so long as the pic or TV show in question spends 75% of its production costs in New York. Paterson’s new version has a few tweaks: Productions will be required to do 75% of their post-production work in New York to remain eligible, and the state now requires an end-credit thank-you. Gotham’s Mayor’s Office of Film, Theater and Broadcasting has emblazoned its “Made in N.Y.” stamp on productions that benefit from its additional 5% tax break, so the governor is likely taking a page out of the MOFTB’s playbook. Producers who don’t want to provide an end credit are required to include a New York promotional video in the pic’s DVD release.
The budget proposal also provides a multiyear committment to the subsidies, which would help attract ongoing television productions.
The California Film Commission, which administers the incentive program, reported Tuesday that independent features comprised 38% of the qualified productions; 27% were studio features, 20% movies of the week, 8% TV series and 7% direct-to-DVD films.
This incentive program is the best tool we have to keep California competitive,” said commission exec director Amy Lemisch. “Productions that otherwise would be lured elsewhere are choosing to stay at home and keep jobs in California as a direct result of the incentive.”
The legislation creating the California program allows the commission to allocate up to $200 million in the program’s first fiscal year, which ends June 30. Those credits must be applied in the 2011 tax year.
Lemisch said $10 million-$15 million in tax credits are still available for eligible productions before July, when another $100 million will become available. California productions receiving the incentives must begin lensing within 180 days to remain eligible.
Approved projects in California include features such as “The Good Doctor,” “Faster,” “Adventurer’s Handbook,” “Scooby Doo and the Lake Monster” and “Burlesque” while smallscreen productions include “Amish Grace,” “Men of a Certain Age,” “Lawman,” “Terriers” and “Important Things With Demetri Martin,” which has relocated from New York to California.
This tax credit program afforded me the opportunity to film in Los Angeles and therefore work with the most experienced and creative talent in the world while sleeping in my own bed at home each night,” said Larry A. Thompson, executive producer of the Lifetime movie “Amish Grace.”
California’s tax credit program covers 20% of below-the-line expenses for production of up to $75 million. It can be sweetened to 25% of expenses for indie feature productions of up to $10 million — and for all TV series relocating to California.
In New York, Kaufman Astoria Studios prexy Hal Rosenbluth said he was elated at Paterson’s move, adding, “The governor recognizes our efforts and that this is a job creator.”
Rosenbluth and others observed that the best productions for the local job market are big-budget TV shows, and that the new version of the legisltation will likely give a boost to that sector of the biz.
I’m really happy that it’s a five-year thing,” Rosenbluth said, “because I have to give my producers assurance that they’re going to get the benefits of the credit over the next year, and the next year, if they want to film a show in my studios.”
In New York, the tax credit is also being touted as encouraging local facility owners to expand. KAS is adding a lavish new stage, recession or no recession, and remodeling continues apace at the Brooklyn Navy Yard’s Steiner Studios.
The governor is due a lot of credit for making this happen,” Rosenbluth said.
The state of New York is in dire fiscal straits after the Wall Street implosion, and the film incentive program is touted as attracting enough industry to New York to generate $1.90 in total taxes collected for every $1 refunded.