Subsidy Sheet: Dear NY, please don’t out-subsidy Gavin Newsom
The Yankees got $38 million in net NYC tax benefits in FY 2024 just to lose the World Series 4-1 to the Dodgers (Sports Business Journal). The Mets got $102 million. What does a championship cost? Don’t ask the Bills or the Knicks.
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This week brought the odious but cynically predictable news that California Governor Gavin “Race to the Bottom” Newsom has proposed increasing his state’s annual film/TV cash subsidy from $330 million to $750 million. This would be $50 million more, notably, than New York State’s own annual $700 million grotesquely wasteful, reimbursable tax credit (NYT).
Days after Newsom’s announcement, The City wrote about a recent decline in NYC film/TV employment, which fell from 42,800 jobs in May to 30,800 in September. According to The City, the pandemic, writers’ strike, and the rise of reality TV hurt NYC’s industry (we note those things all happened long before May, not between spring and fall, so it could all be due to a delay in the production pipeline).
Film/TV lobbyists and unions will no doubt start screaming that NY needs to win the race to the bottom and pour even more into the black hole. Here’s why they’re wrong:
- Evidence gathered by numerous independent analysts show film/TV subsidies are a poor use of taxpayer dollars. The state’s own commissioned analysis found that NY taxpayers lose at least 69 cents for every tax dollar given to film and TV producers.
- New York is already providing far more than $70,000 in subsidies per film/TV job. How much of a difference does that subsidy make compared to market forces, and why are film/TV jobs worth spending so much on compared to other industries? Any subsidy will have some impact, but NY is already a cultural capital and magnet for talent. The claim that the industry will suddenly vanish without the subsidy is a myth.
- There are far better ways for the state to invest. As top job location expert Tim Bartik has noted, investments in job training, manufacturing extension, and education produce far more benefits than costly subsidies like film/TV.
New York’s film/TV subsidy is already outrageously high and should not go any higher. In a world based on facts and not Hollywood and film union lobbying, we’d suggest reducing the reimbursable tax credit by 10% annually. Why should New York State public funds go to Francis Ford Coppola’s next disasterpiece instead of to clean water, the environment, and transit projects that create both good jobs and a measurable public benefit?
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Other NY corporate giveaway news from this week:
- Empire State Development and NBCUniversal are collaborating on a workforce development program for the film/TV industry.
- NY won one of three federally funded computer chip lithography centers (Times Union). In other Micron-adjacent news, former president Donald Trump told Joe Rogan that the federal CHIPS act “is so bad. We put up billions of dollars for rich companies.” (Syracuse Post-Standard)
- The Chautauqua County Industrial Development Agency won’t make an ice cream plant’s subsidy application public, despite the IDA having already discussed the application at an October meeting (Buffalo News). They claim to be waiting until a public hearing is scheduled. Both the state and county have already committed millions to the company, Wells Enterprises.
- NYC mistakenly gave $6.5 million in tax breaks to condo and co-op owners, according to Comptroller Brad Lander (Gothamist).
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