CBC’s new blog, Shrink, Don’t Expand, the New York State Film Tax Credit, recommends rejecting the Fiscal Year 2024 Executive Budget proposal to extend and expand the Empire State Film Tax Credit. 

• Despite providing $6.5 billion in credits since the start of the program, the State has not performed a rigorous analysis to show that the program is necessary to attract productions to the State, or whether the foregone tax revenue from the credit exceeds the incremental economic activity of any additional productions attracted; and 
• The proposed expansion is not accompanied by an analysis demonstrating that it would be economically beneficial, despite it increasing the program’s maximum lifetime cost by 55 percent, from $9.4 billion to $14.6 billion.  

Fortunately, the State is now evaluating the efficacy of its economic development incentives. If this evaluation is appropriately rigorous and demonstrates a benefit to preserving some modified version of the current program, it should inform the design of any policy that preserves a film tax credit.  

The credit is already generous and is relatively comparable to other states. Increasing the credit to match or surpass other states’ subsidies at some point leads to self-defeating competition that drains tax revenues and does not help New York compete on its merits.  

The proposal would increase the annual credit cap from $420 million to $700 million, extend the program for five years, and increase the value of the credit for eligible productions from current levels by raising the share of a production’s costs that are creditable and expanding eligible expenses.