Subsidy Sheet: NY must win the race to the bottom! Even more film/TV subsidies

October 27, 2023

Earlier this year, NY elected officials approved $7.7 billion in giveaways to the film industry and expanded the reimbursement to 30% of future production costs (from 25%). But apparently that wasn’t enough. This week, Governor Hochul signed a feckless bill allowing productions that applied before the changes to get the expanded state subsidy. Reinvent Albany and Citizens Budget Commission opposed the bill.

Previously, promoters argued that the massive $7.7 billion subsidy ($700 million per year x 11 years) was needed to draw new productions to New York and keep ongoing ones from being lured away by other states offering higher taxpayer-provided tax credits. We disagree, but there is a race-to-the-bottom logic to it.

The bill the Governor just signed, however, extends the higher reimbursement subsidy to productions that are completed or already underway. This is like putting another worm on the hook of a fish you’ve already caught.

Next time the Governor or the Legislature tell you they have to cut funding for clean water, public transit, or green energy, ask them how much the cash subsidy to Hollywood producers is being cut.

About the Film/TV tax credit:

It’s not free money. Bizarrely, cash payments to Hollywood producers are off-budget and accounted for as if they were a refund a taxpayer gets from having too much withheld from their paycheck.
Each film/TV job costs NY taxpayers $67,000 per full-time job, according to our analysis. An Amazon HQ2 job, by comparison, would have cost $19,000 per full-time job.
Nearly every study on film tax credits shows they’re a bad investment.

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Other NY corporate giveaway news:

Gov. Hochul signed a bill enabling NYC to replace its J-51 tax break, which currently costs the city $266 million a year (Crain’s). The Community Service Society has called the old J-51 program “tax breaks for the wealthy.”
The libertarians at Reason magazine write about the failures of place-based economic development policies, including Opportunity Zones.
The St. Lawrence County IDA (bordering Canada) approved $9.4 million in PILOT tax breaks for a “green” hydrogen fuel production facility (Watertown Daily Times).

If you got this from a friend, sign up here. This week’s Subsidy Sheet was written by Tom Speaker and John Kaehny.

Please send questions and tips to tom@reinventalbany.org. We look forward to hearing from you!