Earlier this week, the Democratic* supermajorities in the New York State Senate and Assembly joined with Democratic Governor Kathy Hochul to pass a budget that includes at least $8 billion in new corporate subsidies, mainly in the form of massive reimbursement payments to Hollywood and Broadway producers. Though the legislation authorizing Hollywood and Broadway tax credits is in the budget, the future payments from state taxpayers are not accounted for as expenses in the $229 billion budget. Rather, “tax credits,” which are cash payments, are off-budget, giving the impression that they are free money. Lowlights of the corporate giveaways approved by the Governor and Senate and Assembly Democrats include:
- $7.7 billion film/TV tax credit ($700m/year x 11 years, 2024 to 2034 inclusive). State reimbursements raised to 30% costs, some “above the line” costs of actors, directors, and producers now eligible for taxpayer subsidies (Part D, Revenue).
- $300 million Broadway production tax credit ($300m total for 2021-2025), an increase of $100m (Subpart E, Part I, Revenue).
- $35 million commercial production tax credit ($7m a year, extended five years to 2028) (Subpart C, Part H, Revenue).
- $455 million loan for Belmont Park racetrack, plus transfer of Aqueduct Racetrack to NYS and races and jobs to Belmont (Part X, Revenue).
And once again, Democrats did not fully end NY’s Trump Opportunity Zone tax break.
While there was no new mention of funding for Penn Station redevelopment, just a reappropriation of $1.2 billion for below-grade transit improvements, we’ll keep our eyes out for any potential Penn-related boondoggles to come.
Read our full statement on the FY 2024 budget.
*We’re singling out New York State Democrats because they make all budget and policy decisions. They have a supermajority in both houses and hold all three statewide offices. In New York State government, the GOP is essentially irrelevant, has almost no ability to influence decision-making, and is mainly ignored by the news media.
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New York Corporate Giveaway News:
- The New York Times, Gothamist, and Hellgate report on the massive expansion of New York’s film/TV tax credit, which is by far New York’s most generous industry-specific subsidy on paper and in practice, rivaled only by approved (but still very hypothetical) “Green” CHIPS subsidies to semiconductor manufacturers. Ironically, New York’s huge new subsidy was approved just as film/TV writers went on strike.
- PolitiFact asks: Is Reinvent Albany’s claim that independent research shows film/TV tax credits are a bad way to spend tax dollars true? Answer: Basically yes. Independent experts – people not paid by the film/TV industry – have lots of evidence to show that subsidies do not achieve much.
- Despite the breathless hype, Madison Square Garden’s odious $42-million-a-year property tax break isn’t going anywhere after Senate Democrats failed to persuade their Democratic colleagues in the Assembly or Democrat Kathy Hochul to include it in the state budget. (Remind us, why is the State of New York giving New York City property tax revenue away?)
- State taxpayers are forking over $200 million for infrastructure in the hope the massively subsidized Micron chip fab near Syracuse will actually be built. Another $100 million is going toward a community investment fund for Central New York.
- State and Erie County taxpayers are already doling out loads of cash to build a new stadium for the Buffalo Bills, but before that’s done, they will also shell out dough to maintain the existing Highmark stadium.
- Policy wonks Tim Bartik and Timothy Weaver write about the best economic development approaches. Spoiler: it ain’t opportunity zones!
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Fun Fact: New York State uses production ID numbers to keep secret the identity of Hollywood producers and productions approved to get future taxpayer subsidies. The State publishes their identities after they get taxpayer reimbursements, but does not match them to their production ID.
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