Indie spirit for NYC tax credit
Proposal includes provisions that would favor small projectsNEW YORK -- With only two weeks to go to the summer break of the New York State legislature in Albany, the film and TV industry is pushing for legislation that would extend New York City production tax credits at the current 5% through 2013.
But to give NYC time to address budget woes amid the recession, the proposal includes caps for annual payouts by the city, under which it would provide money for small projects more quickly, while delaying payouts to big film and TV productions.
The alternative proposal comes after city leaders recently introduced a bill in the state senate in Albany that surprised the industry by calling for a reduction of the city credits to 4%, with TV shows seeing a decrease to 3% in their fourth year and 2% in the fifth before they lose the right to get a credit. The city proposal would extend the incentives program only through 2011 with a $24 million budget per year and a new $250,000 cap for each film or episode of a TV series.
Feeling it never got a chance to provide input, the industry has developed its own alternative proposal, which in recent days won the support of sponsors in the state assembly and senate.
With two rival city incentives proposals on the table, industry reps are set to meet Monday with members of the office of Katherine Oliver, head of the NYC Mayor's Office of Film, Theatre and Broadcasting. Some industry folks are hopeful they can win over Oliver to put her support behind their proposed bill, while the two sides could combine parts of their respective proposals into a compromise version.
Industry insiders argue that their proposal would help both the production sector -- by keeping the credits at the current 5%, as well as the city -- by limiting annual payouts and budget costs. The NYC Mayor's Office of Film, Theatre and Broadcasting had no comment on Friday.
With the summer break nearing, the clock is ticking. Once the state legislature votes on a new production incentives bill for NYC, the city council has to vote on it as well. The city has said it needs new legislation as its current incentives program is close to running out of money and because the city is struggling with the recession.
Industry folks have said though the bill that city leaders recently proposed would hurt attempts to retain and
attract productions in the Big Apple. It was "misguided" and "would have a really bad effect on the level of production," argued Douglas Steiner, chairman of Steiner Studios. He also highlighted that in an Ernst & Young study NYC was found to be the biggest beneficiary of the incentives as they boost tax revenue and job creation.
Assemblyman Michael Gianaris, for one, is not only supporting a continuation of the 5% city tax credit for now. He has also proposed tripling it to 15%.
"I want to get a debate going in the right direction," Gianaris told THR. "Our production tax credits are the most successful economic development program in recent history. By increasing them, we can maximize the economic benefits at a time when the economy is struggling."
The showdown over NYC production incentives may be in focus today,but the industry is at the same time working with the office of New York State Governor David Paterson to develop and pass a multi-year tax credit commitment on the state level. While a bill could even still be put forward before the legislative session's summer break, it looks likely that it would at least get serious attention in the fall.
The state has paid out production tax credits of 30% in recent years, to which NYC adds its 5%. However, the state program ran out of money earlier this year, and Albany freed up an additional $350 million to keep it going for another year.
However, this short-term fix probably won't bind productions, particularly TV shows, to the state longer-term. As a result, industry folks have pushed for a multi-year approach. The industry is hoping for a state budget of $350 million-$420 million a year for the incentives.