Film/TV Productions In City Stall As Tax Credit Fund Used Up
A state tax credit program for the film making industry in New York state that has enabled both the industry and the state to prosper has run out of money and there are fears producers will desert New York City for other film locations.
Funding totaling $685 million that was supposed to last through 2013 was used up by February 1, 10 days ago, according to a source. New allocations must come from the state legislature as an emergency allocation or be included in next year's budget, which is supposed to be approved by April 1.
However, with the huge deficit facing state budget makers and the expectation that federal stimulus money may come to the state, there have been no indications from state officials regarding the future of the successful program.
Assemblymember Michael Gianaris (D- Astoria), who would naturally be concerned about the fate of the program since both the Kaufman Astoria Studios in Astoria and Silvercup Studios in Long Island City are in his district, according to a New York Post story, said he would expect that lawmakers would have to authorize more funding for the program or watch as movie and TV companies eye other states for their productions.
"This has been the single most effective economic development and jobs-creating program in history," Gianaris declared. "To let it expire would be insane."
Since 2004, when the program began, giving a 30 percent tax credit to both feature film and TV producers, the state and city combined have issued $690 million in tax credits. Some $2.7 billion in taxes has been collected according to accounting firm Ernst & Young.
The spur in productions also created more than 7,000 jobs directly during 2007 and an additional 12,481 jobs indirectly.
The empty fund threatens to bring film and television production activity to a halt. At a recent forum sponsored by Crain's Business News Weekly, NBC Universal Chief Executive Jeff Zucker reportedly warned of the harm that both the city and the industry would suffer if the tax credit is not resumed.
"Television companies that made 19 pilots for programs last year in New York City thus far have committed to making zero," Zucker said.
The Crain's story also reported that Alan Suna, president of Silvercup Studios backed up Zucker's information, saying, "None of us have booked a single pilot this year. Everybody is sending their pilots elsewhere."
Suna added that of four NBC pilots with stories set in New York, two are going to Chicago and two to Canada.
According to the Post story, when the program began in 2004, the state put up $425 million for the fund, which then gave a 10 percent tax credit. The fund was expected to last through 2013. But Governor David Paterson led a move last year to increase the credit to 30 percent. This was responsible for the fund drying up more quickly than originally intended.
A spokesman for the governor reportedly said there is no additional funding at this time in the governor's proposed budget.