PIA is building a bridge between the film industry stakeholder and local leadership, not just for advocating for the business community, but to seek collaborative solutions to climate change, social injustice, and crisis aid preparedness.
Tax Incentives 101
Tax credit programs continue to be the principal factor cited by productions when deciding to film and produce in New York.
Production incentives came about in the 1990s in response to the flight of movie productions intended for a U.S audience, to other countries such as Canada, also known as "runaway productions". Louisiana was the first to enact such an incentive.
New York introduced Empire State Production Tax Credit in 2004 and Post-Production Tax Credit Tax in 2011 and is currently the second-highest tax incentive program behind Georgia.
New York created an additional 10% credit on upstate New York labor costs, thus encouraging production companies to go outside the city limits.
The state of New York is reeling from a major budget crisis due to the COVID pandemic, and our government relations team advises that 2021 is not the time to lobby for any significant changes.
Maintain the incentives as they stand
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Incentives result in the accrual of a net benefit by, for example, increasing employment, which increases consumer spending, translating into higher sales, income, and other tax collections.
Annually in New York, $420 million a year can be allocated as an incentive for companies to produce film projects in New York, thus creating thousands of well-paying middle-class jobs and infusing the millions of dollars spent on film production to local businesses and generating tax revenue for cities and New York State.
The most recent Empire State Development report, for the second quarter in 2018, shows an all-time high in film production spending. A total of 33 film projects were issued credits totaling $206.7 million, in the second quarter of 2018. Those 33 projects spent $953.6 million and hired 60,217 production workers in New York. This is up from an average spend of $266.9 million in 2015, $616.3 million in 2016, and $740.2 million in 2017.
Approximately $861 million in spending and 7,249 hires and stimulated major growth and expansion of New York’s post and VFX/animation companies when Governor Cuomo enhanced and expanded the credit for post-production.
State Legislature passed a minimum budget requirement of $1,000,000 for films shot in Westchester, Rockland, Nassau, or Suffolk County or any of the five New York City boroughs; and $250,000 for films shot in any other part of the state.
Multiplier effects of vendors
New York State Department of Labor
Resuming production would get tens of thousands of film workers off Unemployment Insurance. According to Variety Magazine "The major guilds, such as the unions that represent costume designers, camera operators, and makeup artists, predict that as many as 98% of their members have been furloughed." Ref. 2
Most film production employees are freelance contract workers or "gig workers" - nearly all of whom are receiving Unemployment Insurance due to the COVID-19 shutdown. These workers are highly motivated to get back to work as their income is much higher than what UI provides them.
NEW YORK STATE AND CITIES
Sales tax revenue is essential for the local government to revive drained coffers. Regarding a bailout for Broadway, Anne del Castillo, the commissioner of the Mayor’s Office of Media and Entertainment, says TV and film are poised to ramp back up on soundstages in the fall. "But after losing so much tax revenue from production activity, there’s no way that NYC has any funds to hand out ."
In light of COVID-19, productions utilize some of the most impacted industries; hospitality, dining, and travel, but also lumber, fuel, and hundreds of niche production-dependent businesses that cater directly to the industry itself.
Businesses that are not production-specific, also benefit from the local corner coffee shop, small retailers, dry-cleaners are just a few examples of the economic reach of filmmaking in New York. In the era of COVID, parking lot rentals are on the rise so cast and crew
Studies reveal that tourists visit destinations featured through films. The increasing popularity of film-induced tourism owes to the rise of international travel and the growth of the entertainment industry. We need to keep New York front and center as a backdrop for productions, which encourages travel to our city.
Non-profits: Many productions donate high-quality and new furniture and wardrobe to local non-profits, boosting their efficacy to help vulnerable populations.
Block associations and places of worship: When shooting on location, productions often rent out space for meals and holding for talent providing an extra financial infusion for communities.
Many homeowners host film productions and earn additional income via renting their homes to film production. Considering how many homeowners are struggling to make mortgages, this would be welcome boon to individual recovery and stay off state-run mortgage relief.
WhY advocate year-round?
Government relations is not just for large corporations. Groups whose voices and interests go unheard by legislators and rule-makers may end up being adversely impacted by new laws, regulations or changes to current incentives. Read what elected leaders say.
Tax Incentives are essential for the State of New York to be competitive, not just in the U.S., but around the world, so we plan to lobby year-round to be a persistent voice in the ears of legislators
PIA will advocate for small, independent business owners that are the backbone of New York’s film, television, and commercial production industry.
We know that our businesses make a notable impact on our state’s economy by creating jobs, producing compelling and diverse content, and contributing to the growth of other industries.