MIDDLETOWN – Local leaders took a victory lap at the Michelson Studio II in Middletown on Tuesday to tout the economic benefits of a recent expansion into our region of tax breaks for film production.
The law, signed by Gov. Andrew Cuomo on Nov. 4, added 12 counties, including Orange, Ulster and Sullivan, to those eligible to receive the film production tax break.
The credit allows productions with budgets of more than $500,000 to apply for a 10 percent tax credit on the wages or salaries of film crews – excluding writers, directors, music directors, producers, performers and actors. The state allocates $5 million a year for the tax credit up to 2019.
The credit is in addition to a 30 percent fully refundable tax credit statewide for film production worth $420 million a year.
Speaking at the studio Tuesday, Assemblywoman Aileen Gunther, the bill’s sponsor, praised the efforts by a slew of those in the industry and elected officials to push for the expansion.
Ulster County Executive Mike Hein, who in February pushed for the credit during his State of the County address, said the additional tax breaks can “open up an entirely new and sustainable” part of the Hudson Valley economy.
Though the expansion was lauded by local officials, the tax break has critics.
The Empire Center, a fiscally conservative think tank based in Albany, has pointed to some studies that show film tax breaks show little return on investment. Ken Girardin, an Empire Center analyst, says the incentive may make sense in New York City but hasn’t paid off outside the Big Apple. He questioned officials who supported the credit.
“They are incorrectly accepting the premise that the state should be doing this in the first place and trying to get a bigger piece for their constituents,” Girardin said.
Girardin criticized the incentive as going to the “politically wired” film and television industry over the bulk of ordinary businesses in New York.
“The film and television incentives are arguably the most egregious type of corporate welfare that New York has ever cooked up,” Girardin said.
State lobbying records show that the bill was one of many that was lobbied on in Albany this year by film groups like the Motion Picture Association of America, the Directors Guild of America, the Screen Actors Guild and the Theatrical Teamsters Local 817.
But Laurent Rejto, commissioner of the Woodstock-based Hudson Valley Film Commission, said he’s seen big productions interested in filming in our region, like the movie “Joy” starring Jennifer Lawrence, move to other states or countries for bigger tax breaks.
Despite resistance from New York City studio interests, he said the expansion will increase opportunities for blue collar workers, local young people, union members, local studio owners and bring more film production and post-production in our area.
“We really hope we can compete again on a level playing field,” Rejto said.
Eric Michelson, owner of the 60,000-square-foot Michelson Studio II, said his massive sound stage will now become more attractive and competitive because of the expansion.
“We have 60-foot ceilings. Our biggest competitors have 40 down in New York City,” Michelson said.
© 2016 Times Herald-Record