ALBANY – Upstate is pitted against upstate over expanded tax breaks for the movie industry, a controversy that has put Gov. Andrew M. Cuomo in the referee’s seat, with a decision due today.
At issue is whether to allow another 14 counties – in addition to the 40 counties approved in March – to offer extra state tax breaks to help lure film companies to economically battered upstate regions.
Critics say the bill not only changes the intent of the tax credit effort approved just seven months ago, but also undermines the upstate economic development purpose by including counties close to New York City – such as Rockland and Putnam. Film companies based in New York City will be happy to use the tax credit to shoot in those nearby counties rather than pay for lodging and other costs of filming in, say, Buffalo.
“If the other 14 counties get this, a lot of films will slip away. It will be a watered-down program that doesn’t meet its intended purpose,” said Tim Clark, commissioner of the Buffalo Niagara Film Commission.
The film tax credit program, like other economic development efforts over the years, is engaged in an old New York plot: What’s good enough for one region of the state must be good enough for everyone.
As part of this year’s budget, lawmakers approved an extra credit – 10 percent atop the existing 30 percent – that film companies can get from the state for labor costs associated with shooting or doing post-production on a movie in New York State. A $5 million total annual cap was placed on the additional credit program, which was available to counties in Western, Central and Northern New York.
Like the much-criticized Empire Zone program that began in the 1990s, the new film credit program was supposed to go to economically hard-pressed areas where film companies are not necessarily eager to travel.
But like the Empire Zone program, lawmakers in other upstate areas, including some that are economically vibrant compared with the rest of the region, want in. The pending legislation on Cuomo’s desk would allow 14 additional counties – including those in the Mid- and Lower-Hudson Valley areas – to participate.
Clark said the original program from March was approved as an incentive to get film companies to look more closely at upstate communities such as Buffalo, Rochester and Syracuse, and those in the Adirondacks.
Buffalo, for instance, lost a bid to Albany for shooting a film starring Angelina Jolie and to Cleveland for an upcoming movie with Kevin Costner for purely financial reasons, local economic development officials believe.
Film companies and their movie stars, many with offices or homes in New York City, tend to follow the path of least resistance when it comes to selecting locations for movies. When choosing New York State, Clark said, it often means either New York City or the eastern part of the state.
“This program is not going to be effective if it gets blown out to the other counties,” Clark said.
State Sen. Hugh Farley, a Schenectady County Republican who sponsored the legislation that includes all the counties in his district and far beyond to as far south as Rockland County on the New Jersey border, doesn’t agree.
“I don’t buy that argument at all,” he said. “I think all parts of the state should be treated equally, and for some of these 14 counties, this can be a tremendous economic boost.”
“There’s no reason they should be left out,” Farley said of the 14 additional upstate counties.
The additional counties were all enthusiastic about getting into the program, said Farley, 80, who joined an actors union and paid its $3,000 dues when he had a small speaking part in the 2013 Ryan Gosling movie “The Place Beyond the Pines,” which was shot in Schenectady.
“I don’t think anybody should be parochial and say only their area should be included,” Farley added.
A fellow Republican, State Sen. Patrick Gallivan of Elma, sponsored the original bill to provide the tax breaks to a select number of upstate counties; that was folded into the state budget when it passed in March. In June, he was the sole senator to vote against Farley’s bill, which also passed, 120-20, in the Assembly.
“This legislation would negate any gains we made with that tax credit,” Gallivan said of the Farley bill.
He said the additional tax breaks not only would be a negative for areas west and north of Albany, but also could push more films out of New York City to nearby Rockland and Putnam counties.
Gallivan, who said he has communicated his concerns to Cuomo’s office, said the original program that passed in March should be given a chance to work.
“I understand we have a whole state to consider,” he said, “but regions in the state are different. If you are advancing something that benefits the entire state, the rules don’t need to be the same in every region.”
Critics say the film tax credit program, which totals $420 million this year, is an inappropriate giveaway to film companies that do not need help from taxpayers in such a high-tax state as New York.
The Farley bill does not provide any additional tax breaks beyond the $5 million cap for the 10 percent extra in credits film companies get for going upstate, meaning $5 million will be spread around 54 upstate counties instead of the originally targeted 40 counties.
Farley said that adding more credits beyond the $5 million might be an option for next year’s budget.
“I’m hopeful (the governor) signs it. I think there’s tremendous enthusiasm for it. I think it’s very important for me and the 14 counties involved in it,” Farley added.