NYC: Victim of Its Own Success (Again)?
Anne Hathaway on the midtown Manhattan set of "The Devil Wears Prada" (Source: mediabistro)
There is no disputing that the state and city tax incentives for film that took effect in New York in 2004 did gangbusters for the city. According to an article in the New York Times today, the film and TV industry spurred 10,000 jobs last year and became the fastest-growing source of employment in NYC. NYC experienced overall job growth of 2% over last year, and that growth was led by a 6.7% jump in film and video production jobs and a 9.2% jump in radio and TV broadcasting jobs. The city estimates that of the 3 million private-sector jobs in NYC, 100,000 are in the city's $5 billion-per-year film and TV industry. Furthermore, since 2002, NYC production shooting days have more than doubled and 14 TV pilots were shot in 2005 versus one pilot in 2004.
But this runaway success (pun intended) is not without its caveat. The city had set aside $50 million and the state had set aside $125 million to dole out as tax credits for film. The city and state had planned to give out these credits over four and five years, respectively. But the tidal wave of productions that hit the city immediately after the incentives were passed has tapped all of the city's allotted $50M and most of the state's $125M--in just 13 months. We must remember, however, that while these are huge chunks of change, the increase in productions did create a slew of jobs and brought in new business and more money into NYC's economy--exactly how much is still being researched.
But the article offers one telling example of just how much that might be. Martin Scorsese's "The Departed," a set-in-Boston but shot-in-NYC remake of Hong Kong crime drama "Infernal Affairs," would have gone to Toronto if NY's tax incentives didn't exist. That production alone spent more than $23 million over 75 days in NYC, including $647,372 on hotels, $218,635 on car rentals and $11.8 million on wages to local workers.
State officials still very strongly support the incentives, and in fact are seeking to increase them, but some city officials are concerned about the city's treasury being tapped out. Critics complain that many of the credits are being paid out to productions that would continue to shoot in NYC anyway, with or without credits. These include long-running TV shows like "Law & Order" and "The Sopranos." To this, CEO of NBC Uni's TV group Jeff Zucker said, "First of all, the 'Law and Order' franchise single-handedly supported production in New York City when there was virtually no one else here. To penalize them because they were holding up their end of the bargain long before anyone else seems patently unfair. In addition, there is another state next door that is begging for the 'Law and Order' productions." Zucker is referring to the garden state (New Jersey), which has some new film incentives of its own to offer.
>> Bid to Lure Films Works So Well, It's Nearly Broke [NY Times, 3/14/06]
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>> Meanwhile in Gotham...