City benefits from all New York taxpayers’ film incentives

Taxpayers across New York pay the movie and television industry to operate in our state, but New York City reaps roughly 90 percent of the benefits.

That’s one finding in a recent, state-mandated study by Camoin Associates, a Saratoga Springs-based firm led by Rob Camoin, who got his start as the village of Saranac Lake’s community development director for four years in the 1990s.

A vigorous debate continues nationwide over states competing to give incentives to movie and TV makers. It started in the 1990s in reaction to Canada luring moviemakers north. In the rush, many states gave away more than they got back: Florida’s incentive programs has been spiked, and those in Louisiana and Texas were reduced. On the other hand, California, long the industry’s home, got into the incentive game recently to compete for what used to come to it naturally, and Georgia continues to go great guns.

“Georgia vaulted from the middle of the pack into third place for film production in the U.S., trailing only number one California and number two New York,” says a recent article in MoveMaker magazine.

New York’s film tax credits date to 2004, and Gov. Andrew Cuomo is a big proponent of them. The Camoin study mostly touts the movie and TV industry’s positive economic effects, which are substantial — our incentives’ return on investment is better than in some states — but it also raises the question of where the returns are distributed. Is this a tax credit that helps one part of the state get richer at the expense of other parts, especially rural areas?

It’s important to note that a small, lower-income town in our rural area has benefitted greatly from New York’s film tax credits. The Camoin report notes that in 2013, “‘Teenage Mutant Ninja Turtles’ brought in over $1 million to Tupper Lake.” Some locals say it was even more than that. Jim LaValley, head of Tupper Lake group Adirondack Residents Intent on Saving their Economy, told the Enterprise earlier this winter that movie company Paramount “circulated about $6 million into the local economy out here.” The money it paid to use Big Tupper Ski Area for a riveting action scene — a fight on a tractor-trailer rolling down a mountain — let the volunteer-run ARISE reopen the ski hill for one more season the following winter.

Nevertheless, for every shoot in a small upstate town such as Tupper Lake, there are too many to count in New York City, and we’re all paying for them.

The study showed that New York gave out more than $1.3 billion in tax credits for film production and post-production in 2015 and 2016. Looked at one way, it broke even tax-wise because the total income, sales and other taxes collected as a result of that economic activity was slightly more than the $1.3 billion. But on the other hand, pointed out, “the payback outside New York City comes to about 60 cents on the dollar, and 51 cents of that goes to the state.” The other 9 percent goes to local taxes.

The idea, of course, is not to break even tax-wise but to spur economic activity, and it does: $6.5 billion or so in direct spending and another $6 million in indirect spending, according to the study. But the study also shows that about 90 percent of that is spent in the city. It’s the same story for jobs associated with the tax credits; the city gets more than the lion’s share.

We’re not sure exactly how to fix this. Since the film industry is so regionalized, would it be more fair to run it through the Regional Economic Development Council system, in which private and public-sector reps from each part of the state decide what economic projects they want the state to pay for in their areas? Or maybe a cap on the percentage of the total incentive that can be spent in the city, with a chunk of the money dedicated to upstate?

In an ideal fantasy world, private business would pay for private things and taxes would pay for public things, but the United States has gone a long way from that. Businesses today count on the socialized economy — which some call corporate welfare — and the film industry, which can pack up and move to a new state quicker than most, is especially inclined to jump at the latest, juiciest taxpayer-funded offers.

We’d like to see the country back away from this model, but such steps would have to be slow and careful. In the meantime, we’d like to see New York’s overall film incentive amount reduced, as well as changed to make it more fair geographically.