NYers pay $42K a job for film-tax breaks

The film “Departures,” with Maisie Williams from “Game of Thrones” and Ken Jeong from “The Hangover,” began filming in Ulster County in April. Then, the film headed to neighboring Dutchess County for production.

The combination of filming and producing movies and TV shows in New York is a key goal of the state's $420 million a year film-tax-credit program -- the most generous of its kind in the nation.

But the program has drawn criticism for its largesse: Studios received about $42,300 for every direct job created in 2015 and 2016, a report commissioned by the state found.

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New York issued $730 million in tax breaks to 273 movies and shows since late 2014, averaging nearly $2.7 million per production, state records analyzed by the USA Today Network in Albany found.

Six shows got more than $20 million each in taxpayers' money, the records showed. The most was the FOX show "Gotham," which got $25 million over two years, followed by $24.5 million for FOX's "The Following."

Netflix's "Orange is the New Black," which films largely in Rockland County, ranked fifth at $20.2 million for two seasons, according to the records.

Critics said the breaks -- which are the state's largest tax incentive program -- should be put to other purposes to help the state's economy, particularly since almost all of the projects are in New York City.

"There is a big film industry in New York, and there has been for decades," said David Friedfel, director of state studies at the Citizens Budget Commission, a business-backed group.

"The purpose of economic development incentives should be to encourage the development of an industry, to help companies with a bridge to profitability."

Database:Regional Economic Development Council projects

On the rise

The tax breaks, though, have fueled a surge in productions in New York because studios can get up to a 30 percent reimbursement if they film in New York City or its immediate suburbs.

The incentive grows to up 40 percent back in counties further north, including Dutchess, Putnam and Ulster counties -- as well as the Southern Tier and western New York.

The productions spent $6.5 billion in the state in 2015 and 2016 and created about 34,200 jobs, while the state gave out nearly $1.5 billion in tax breaks, state records showed.

The Hudson Valley, in particular, has been a beneficiary of the growing sector as studios are finding it more economical to film in the suburbs than the city.

The Hudson Valley Film Commission tracked nearly $9 million in direct spending in 2016, an increase over the $5.5 million spent in 2011. Direct spending would be money spent by production crews on things like food, hotels and other expenses. 

“It should be looked at as any type of manufacturing or biotech or any other industry that comes in,” said Mary Kay Vrba, president of Dutchess Tourism, which works closely with the Hudson Valley Film Commission and film crews.

“This is contributing to the economy of Dutchess County, the Hudson Valley and New York state.”

In Westchester, filming boosted the economy by $18 million in 2014, up from $13.8 million in 2013, according to Westchester County Director of Tourism & Film Natasha Caputo.

And, she added, “It builds our local pride. It enables us to promote Westchester. It lends to our story as we sell Westchester.”

A number of productions have been made outside the city:

• Scenes for “The Amazing Spider-Man 2” were filmed in Rochester. 
• The HBO series "Divorce," starring Sarah Jessica Parker, films in Westchester County. And another "Game of Thrones" star, Peter Dinklage, has this year worked on a new film in Westchester and Rockland counties. 
• "The Rewrite," starring Hugh Grant, was set in Binghamton and scenes were filmed there. 
• Lena Dunham’s “Girls,” on HBO, has been filmed in Dutchess and Ulster. 

Expanding credits

The program, though, remains mainly based in a New York City.

In 2015 and 2016, 91 percent of the productions' spending occurred in the city, according to Camoin Associates, a Saratoga-based consulting firm hired by the state to analyze the program.

To try to drive more films and shows to outside the city, 54 counties north of Westchester can now provide up to 40 percent back on productions.

Last fall, Gov. Andrew Cuomo signed a bill into law that allowed 12 counties through the mid- to upper-Hudson Valley to offer the 40 percent back.

And it has had an immediate impact, mid-Hudson officials said.

“Furlough,” which stars Whoopi Goldberg and filmed in Dutchess and Ulster counties earlier this year, would not have been made in the region if the state hadn’t expanded the tax credit, said its director, Laurent Rejto.

Claude Dal Farra, co-president of Ulster County-based BCDF Pictures, said “Departures” was gearing up to film abroad when the state adopted the expansion.

“It was just enough for us to pause and reconsider,” said Dal Farra, producer on “Departures.” “We ran the numbers and it was almost a break even. We decided to stay here in the U.S. and shoot it here.”

Extended to 2020

While fiscal watchdog groups have criticized the credits, state officials and those working in the film industry have defended them.

The program has led to the 34,200 direct jobs in New York, and other nearly 37,000 "indirect" jobs, the Camoin report said.

“They rent hotel rooms, they hire caterers, they maybe hire extras, they bring additional revenues,” said Rob Gearhart, an Ithaca Common Council member who is also associate dean of the Roy H. Park School of Communications at Ithaca College. 

The tax credit prompted one of Gearhart’s colleagues to secure certification for film-production facilities at Ithaca College.

The program, despite the criticism from Republicans and fiscal conservatives, was extended through 2020 in the state budget approved April 9.

Howard Zemsky, president of Empire State Development, which administers the program, said some business incentives in New York are more of a benefit to upstate than downstate -- and vice versa, as is the case with the film credits.

"That industry is a positive return on investment for New York. And it gets more positive with each passing year," Zemsky said.

Cuomo has been criticized for his support of the program because he has received major campaign donations from Hollywood since taking office in 2011.

And a state report in 2013 questioned the credits, saying the state lacked "sufficient justification for the size of the film credits." The segment didn't make it into the final version of the report.

New York's program outpaces any other state in the nation, including California, which allocates $330 million a year.

Helping the economy

In the Hudson Valley, Anthony Stracquadanio of Wappingers Falls said film production is responsible for keeping him employed.

“The tax credit has let the industry emerge here,” said Stracquadanio, a grip electric who worked on “Furlough.” “There was a point where nothing was happening up here -- and now it’s kind of blowing up.”

Some in the film industry have yet to benefit from the tax credit, but see potential for growth. 

Edward Roy operates J6 MediaWorks and The CineHub in Beacon, Dutchess County, and with gear to rent, studio space and an editing suite, he believes he is well-positioned to see benefits.

“The vision would be, eventually, that The CineHub could be the source for a $90 million movie,” Roy said.

Some areas of the state are waiting for similar investment.

Despite the connections to “The Rewrite,” Binghamton Deputy Mayor Jared Kraham said, “We’re not seeing a lot of interest.”

He would like that to change, so Binghamton, like Dutchess and Westchester, could benefit from the Hollywood spending and attend.

Columbia Pictures and its crew, for example, in 2013 spent $2 million over 10 days filming action scenes in the Rochester area for “The Amazing Spider-Man 2.”

“Not only does it mean short-term employment in the performing arts, it’s really invaluable in terms of raising Binghamton’s profile, on the state and national level,” Kraham said.

John W. Barry: jobarry@poughkeepsiejournal.com, 845-437-4822, Twitter: @JohnBarryPoJo