N.Y. tax incentive meeting sidetracked

Control of the State Senate at issue

NEW YORK -- Chaos in the New York State Senate in Albany on Monday overshadowed a meeting of film and TV production sector representatives with the office of Katherine Oliver, head of the NYC Mayor's Office of Film, Theatre and Broadcasting, to discuss the future shape of the city's successful production tax incentives.

The Mayor's Office didn't comment Monday, but two sources familiar with the situation said the two sides expressed a willingness to discuss the situation further.

With only two weeks to go to the summer break of the New York State legislature in Albany, the industry has suggested extending the New York City production tax credits at the current 5% through 2013. But to give New York City 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 was drawn up after city leaders recently introduced a bill in the State Senate 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.

With the NYC incentives program running low on money, a bill on an extension or a new program would need to be voted on before the summer break to ensure continuity.

But an apparent coup in the State Senate provided a major distraction Monday. Democrats appeared to have lost their majority in the chamber after controlling it for five months.

According to the New York Times, a leadership fight broke out on the Senate floor Monday afternoon, with two Democrats joining the Republicans in a motion to displace Democrats as the party in control. This gave the motion a 32-30 majority.

Until early evening, the situation remained unclear though as both parties claimed to be in charge of the State Senate.

Given the developments, entertainment industry reps said that the dust would have to settle before they could fully assess the situation. "We need to see what happens there the next couple days," said one source in the production sector. "Everybody is going to take a step back," another one said.

Another personnel development over the weekend also made the situation in Albany somewhat fluid as Marisa Lago resigned as president and CEO of the Empire State Development Corp. and commissioner of the Department of Economic Development.

The person in the positions oversees Pat Swinney Kaufman, who heads up the New York State Governor's Office for Motion Picture and Television Development as executive director. Empire State Development Corp. Upstate president Dennis Mullen will assume the roles from Lago.