Amid the economic and fiscal fallout of the pandemic, in a proposed FY 2022 budget that would postpone $400 million in scheduled middle-class tax cuts while imposing $1.5 billion in tax-surcharges on millionaire earners, Governor Cuomo is also seeking to extend New York’s generous Film Production Credit and Post-Production Credit.
The credit allocates up to $420 million per year for eligible productions, although the amount probably dropped temporarily during the pandemic’s interruption of normal production activities in 2020. New York dispenses that money in the form of cash payouts, technically classified as fully refundable tax credits, to cover 25 percent of “below the line” costs on eligible production and post-production expenses—a category of labor, supplies, and materials that excludes money spent on directors, writers, and featured actors. For expenses incurred in upstate counties, the refundable credit can be bumped up by 10 percent.
Cuomo’s FY 2022 Executive Budget revenue bill would extend the credits’ expiration date one more year, to the end of 2026 from the current 2025. It would also add a 10 percent credit “bump” for post-production work performed in Saratoga, Warren, Washington, Columbia, Dutchess, Greene, Orange, Putnam, Rensselaer, Sullivan and Ulster counties.
Since its inception in 2004, the Film Production Credit has cost New York taxpayers more than $5 billion—making it, far and away, the most generous ongoing corporate giveaway on the books in New York State, which has spent more on film credits than any state.
Cuomo has repeatedly expanded and extended the film credit—and Hollywood has shown him its appreciation. By the end of his first term in 2015, Cuomo reportedly had raked in $900,000 in contributions from the entertainment industry; by now, the total no doubt comes to well over $1 million, including money raised in a rare trip to California in late 2017, when he was gearing up for his second re-election campaign. The New York governor’s role as a “strong protector” of the film credit was cited in one of the internal Sony Corp. executive suite emails that became public after the company was victimized by a suspected North Korean hack in 2015.
Cuomo recently was awarded an Emmy by the International Academy of Television Arts & Sciences “in recognition of his leadership during the Covid-19 pandemic and his masterful use of television to inform and calm people around the world.” At the awards ceremony, Cuomo was lauded by celebrities including Ben Stiller, who received state subsidies for his 2018 Showtime series, Escape from Dannemora, and Robert DeNiro, who with his son is a major investor in a planned Queens studio complex that would significantly benefit from the credit.
Not surprisingly, the film industry and Cuomo’s economic development agency both insist the program pays for itself. A recent state analysis claims the credit “generated” $8 billion in spending that directly and indirectly “resulted in 85,835 jobs” in 2017 and 2018. However, that analysis assumes (preposterously) that the industry would have created no jobs without the credit, and it effectively counts as two “jobs” a single individual who was temporarily employed by the industry in each year.
In fact, the billions of dollars funneled from New York’s treasury to movie and TV producers had no statistically significant impact on the industry’s employment in the Empire State through 2017, according to a recent multi-state study of such tax incentives. That study echoed the observations of other independent researchers, including a November 2013 staff analysis for Cuomo’s own first-term Tax Reform and Fairness Commission, which found that arguments in favor of the credit were based on the “questionable” assumption that “no credit-qualifying film would have been produced in [New York State] absent the credit despite the long-standing existence of a well-developed film production industry in the state.”
You may also like
Enjoying our work? Sign up for email alerts on our latest news and research.
Together, we can make New York a better place to live and work!