Recently, New York State has announced that there is no additional funding for the state tax credits included in their latest budget proposal. New York City has played a major, major role in the entertainment industry over the past few years. There is currently a petition to save the tax credits circling the net, and it lists a vital fact that anyone in the Government these days shouldn't ignore: According to a 2007 study by Ernst and Young, the state and city combined have issued $690 million in tax credits and have collected $2.7 billion in taxes from movie and television productions. This program pays for itself! It helped create over 7,000 jobs, directly, in 2007 and over 12,000 jobs indirectly. The Mayor's Office of Film, Theater and Broadcasting reports that in 2002, there were 14,858 NYC location shooting days and in 2008, we reached over 27,250 days. There is a direct correlation between the growth of this industry and the tax credits provided from the state.
In these tough economic times, its understandable why a few government programs would need to be cut, and spending tailed off. However, its is unwise to cut back spending when those programs create jobs. I think its safe to assume that the Governor's office doesn't quite understand the implications of removing the tax credits, nor may they see the connection between tax credits the projects. As someone using Tax Credits in other states to raise funding, I can say first hand that they are an essential interest for any investor, and despite what the project actually is, the majority of our investors wanted strictly to take advantage of the State Tax Credits and Federal 181.
In the past 24 hours, I have been in contact with a few colleagues from New York, still working on projects there, or I should say, WERE working on projects there. Since the announcement that the New York State Tax Credits won't be making an appearance anytime soon, SIX projects in pre-production have shut down. Their investors were investing in large part due to the Tax Credits and now it is not that lucrative for them. With the help of each project, we tallied the number of people all the projects employ: 288 People.. That's almost 300 people now without jobs. 5 out of 6 of these projects were being made between 1 & 2 Million Dollars, the 6th had a budget of 650k.
This is very unsettling news for anyone and already New York has seen an immediate reaction. Please take the time to sign the petition. I just did, it takes less than 20 seconds.