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Business and film subsidies draw scrutiny at forum

Joe Mahoney, CNHI State Reporter
Posted 2/11/23

Gov. Kathy Hochul’s push to sweeten the state’s film and television tax credit program comes as some lawmakers question whether the state’s economic development efforts are yielding sufficient benefits

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Business and film subsidies draw scrutiny at forum


ALBANY — Gov. Kathy Hochul’s push to sweeten the state’s film and television tax credit program comes at a time when some lawmakers are out to determine whether the state’s economic development efforts are yielding sufficient benefits for New Yorkers.

Representatives of the entertainment industry and the unions whose members have secured jobs from New York productions threw their support Thursday to Hochul’s proposal to boost the film subsidy from $420 million a year to $700 million annually.

Citing his experience as commissioner of the Buffalo/Niagara Film Office, Tim Clark, said at a legislative budget hearing the New York incentives “absolutely drive where movies and scripted television shows are made.”

Before the creation of the Empire State tax credit, Clark recalled, films set in Buffalo were shot in Toronto, Winnipeg and even Southern California. In a reversal of fortunes, Buffalo has played host to films with story lines set in locales as diverse as Clarksdale, Mississippi,, and Martha’s Vineyard, Massachusetts, he noted.

“We are now a movie-making destination -- something I never envisioned when I became film commissioner 17 years ago,” Clark said.

But some lawmakers and others at the hearing were openly skeptical about the enhanced package of credits the Hochul administration has crafted.

The bundle includes assistance for so-called “above the line” costs, making expenses for actors, directors and screenwriters eligible for the taxpayer subsidy. Up until now, the film tax credit has been for the costs of equipment and payroll for a range of costs needed to bring a project to fruition.

Sen. Liz Krueger, D-Manhattan, whose district has hosted a number of film productions benefiting from the credit, noted the Hochul proposal would help subsidize the cost of hiring superstars such as Brad Pitt, George Clooney, Jennifer Lawrence and director Steven Spielberg.

“Do we really need to subsidize people at that level?” Krueger asked Hope Knight, a Hochul appointee who oversees Empire State Development, a public authority. “Why are we doing that? We always said ‘no’ to that before.”

Knight noted that New York now has to compete with some states offering the “above the line” credit, but while the New York plan would sweeten the current subsidies, the above the line credit would be capped at $500,000 per individual.

The Hochul administration has been promoting the budget initiative by pointing out the proposed additions to the film tax program will help the state sustain an industry that has led to the creation of 57,300 direct and indirect jobs and produced more than $20 billion in spending within the state.

Supporters of the enhanced credits say the state has recently lost some film projects to New Jersey, while several other states have also ratcheted up subsidies for film and television productions.

With the hearing focused on the state’s economic development strategies, Knight was asked by Assemblyman Christopher Friend, R-Big Flats, about whether employment at the sprawling Tesla plant in South Buffalo is achieving the job creation commitments tied to the state’s investment of nearly $1 billion in the project.

Knight said assurances from Tesla as well as data from the state Department of Labor indicate Tesla has hit its employment targets, though she noted that her agency is seeking to get confirmation on the job numbers.

Last month, Investigative Post, a news site in Western New York, reported that many of the new jobs at the Tesla plant are entry-level positions requiring only a high school diploma. Investigative Post reported the state’s investment in Tesla has yet to generate other economic development in the surrounding region.

When the state investment in the Tesla plant was authorized by the administration of former Gov. Andrew Cuomo, that was among the goals of the state political appointees who oversee state investments in business development.

Ron Deutsch, director of New Yorkers for Fiscal Fairness, a progressive advocacy group, told lawmakers the state’s various tax subsidy programs have created little other than scandals. “The state and local governments need to realize that true economic development is about investments in public goods like early childhood education, childcare, K-12 and higher education, the public workforce, homecare and affordable housing,” Deutsch said.

The state budget approved last year included an investment of some $850 million in public money for a new stadium to be used by the Buffalo Bills football team. Hochul added the stadium subsidy to her budget weeks after she presented her initial spending blueprint for the state.


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