by Dish Staff
California Governor Jerry Brown has approved a bill offering up to $330 million in tax credits to subsidize film and TV production in the state over the next five years. Dennis Saffran blasts a similar program in New York, which costs taxpayers millions and offers little in the way of a return:
Its $420 million price tag makes it the state’s second-largest tax subsidy, trailing only the credit for redevelopment of contaminated “brownfields” (itself a program of dubious merit benefitting a politically favored industry). Both were blasted in a report prepared last year for Cuomo’s tax-reform commission, which recommended cutting the film-credit program by $50 million because “it does not appear to pay for itself.” The report spelled out how lucrative the film credits—which equal at least 30 percent of qualifying production costs—can be to their recipients. The “credit exceeds tax liability many times over,” the report’s authors noted. And because the credit is “refundable”—meaning that the taxpayer is entitled not only to a tax refund but also to a cash payment if the credit exceeds tax liability—the state in fact receives no tax revenue, but rather pays recipients to film here.
These payments go to a tiny sliver of the state’s businesses. The report noted that the “film production credit accounts for 22 percent of the total cost of New York’s business tax credits, but the industry accounts for less than one percent of the state’s employment.”
The Dish last took a look at film and TV production credits back in February, when the producers of House of Cards tried to shake down Maryland for a bigger tax break.