Suspending disbelief can make for a great entertainment experience in the movie theater, but it makes for terrible tax policy.
In the past two decades, film and television producers have cajoled governors and state lawmakers into subsidizing their projects. It takes the form of a generous tax credit worth 25% of “below-the-line” project costs. Because of the way the subsidies work, producers can collect a piece of the $420 million in annual “credits” worth far more than they paid in state taxes. The state routinely cuts checks for $10 million or more to highly profitable productions with bankable stars, such as Blue Bloods and John Wick 3. Gov. Kathy Hochul is proposing to further sweeten the deal by jacking the film credit up to 30% and handing out $700 million per year in credits.
Proponents put on a great act to defend the practice, but when the show’s over, arguments for the film credit boil down to how other states offer incentives. The argument goes that some shows, movies—and jobs!—would go to those other states if New York didn’t shower producers with public money.
And here’s where disbelief takes hold in the halls of state government.