New York state's $7.7 billion in benefits to its film industry came under scrutiny Wednesday. State lawmakers took note of new analysis showing taxpayers aren't getting the best return.
An independent analysis of the film production tax credit conducted by a Philadelphia-based consulting firm found that about $700 million a year in lost revenue is only being replaced at about 31 cents on the dollar.
“Now that we have enough evidence that much of this program and spending is not being spent wisely, we have to do something about it,” state Sen. Jim Skoufis said after a hearing on economic incentives. said. .
Last year, the city of Albany signed a massive new incentive package to encourage film and TV productions to film in New York, totaling $7.7 billion over 11 years, but it's unclear how much of that money will actually go to the state. There is questionable evidence as to whether it provides economic benefits.
Ashley Ranslow, New York state director for the National Federation of Independent Business, testified that the medium-sized businesses she represents haven't really seen a major impact from the program.
“I question how $300 million of $1.5 billion really helps small businesses in general,” Ranslow told lawmakers.
During the hearing, Skoufis tasked the head of New York City's economic development department with asking whether at one point an analysis of incentive programs her agency had implemented had ever shown a negative return on investment. I asked please.
“That wasn't the case while I was sitting in this seat, but as I look back, I see if it was. I can do that.''
she tried to question ~ Abominable independent research The film production tax credit mandated by Gov. Kathy Hochul and the Legislature was cut because it did not sufficiently incorporate the trickle-down economic benefits that small businesses, such as caterers and hotels, receive when making movies. town.
“I think we need to look at that metric more comprehensively, because a lot of the film industry is tied to the small business community that these productions exist in, and so the consequences of these productions being involved in the local economy. , because it would provoke significant activity,” Knight told lawmakers.
Knight pointed to studies in other states that estimate the production tax credit for local and state governments to be $1.70 for every dollar earned.
Brian O'Leary, a tax advisor for the Motion Picture Association, the industry group promoting the incentives, also pointed to other reports that attempt to prove the program's value.
“Throughout the beginning of this program's history, they've done a credible job of showing not just growth in production, but growth in jobs, union jobs and investment in infrastructure,” O'Leary said. .
But Skoufis pointed out that a series of reports and investigations submitted by the MPA were paid for by the film industry body itself.
“They conveniently omitted that those analyzes were commissioned by them and paid for by them. So of course they're going to come back and emphasize exactly what they want to emphasize.” A Hudson Valley representative later told reporters.
State Sen. Liz Krueger, chair of the powerful Senate Finance Committee, raised considerable doubts about the incentives at the end of the hearing, saying states can't easily rely on Washington for financial support, so tighten up. pointed out that it was necessary. The next administration of President-elect Donald Trump.
“We know we are entering an era where we can expect significantly less cooperation and funding from the federal government. We have to be smarter about whether it's a good thing or whether it's a bad way to spend people's money,” Kruger said.
“Frankly, are we just going to continue with bad policy forever, knowing it's bad and not doing anything about it?” she added. “I hope we can choose to take some action against them.”
The nonprofit organization Reinvent Albany calculates that New York City will spend $75,000 on every film and television job supported by the program.
“I want to credit the state Senate for breaking through the fog of Hollywood lobbying and using the facts to show that the $7.7 billion Film and Television Tax Credit and other corporate subsidies are a waste of New York taxpayers' money. '' Executive Director John Caney, who also testified, told The Paper. Will post after the hearing.
“It could be anyone, [Empire State Development] And does the film industry think it's okay to spend $75,000 in taxpayer money on a year's worth of full-time film work? ” he added. “This is what legal corruption looks like in New York.”
