NYS senators from Syracuse ask why New York awards so much tax money to movies
By Michelle Breidenbach | email@example.com
on February 10, 2014 at 3:28 PM, updated February 10, 2014 at 3:37 PM
SYRACUSE, N.Y. - Sen. John DeFrancisco, R-Syracuse, wants to know why New York state lavishes $420 million in tax credits on the movie industry - hundreds of millions more than other industries combined.
"Why is this so disproportionate in our state when there are so many other industries?" DeFrancisco asked. "I don't get it."
DeFrancisco, chairman of the Senate Finance Committee, asked the question of NY Economic Development Commissioner Ken Adams during hearings Monday on Gov. Andrew Cuomo's 2014 proposed budget.
Cuomo's proposal continues a state tax credit for the film industry at its current $420 million a year. The next pot of state help for businesses, called Excelsior, will likely total about $200 million this year for all industries, Adams said.
"Do you think that's the optimum economic development model?" DeFrancisco asked.
In his questioning, DeFrancisco asked whether the state could wrap $420 million for films into Excelsior and make the film industry compete with all other kinds of businesses.
Adams said he did not think that would work.
"The industry is very different and the incentive works in a very different way from the Excelsior program," Adams said, adding that Excelsior can be combined with other state help in a package specific to a business.
Another difference, he said, is that success of the film tax credit is based on "positions," which means temporary jobs. Excelsior counts full-time, year-round jobs, he said.
Sen. David Valesky, D-Oneida, also questioned the comparison and asked Adams to provide more information about the various tax credits.
"The out-of-whack concern, I would share," Valesky said.
A draft of a report last fall by a Cuomo-appointed tax commission criticized the program, saying 92 percent of the tax credits were given to films in New York City and seem to be simply moving current jobs around.
The report also said the state is paying out far more in tax credits than the companies would owe in taxes. That's because the tax credit is set up as a refundable credit, which means the state writes a check to a company if it earns more tax credits than it owes.