State would make more money off filming if it ended subsidies

From the Village Voice:

When the D.C.-based subsidy watch group Good Jobs First released its analysis recently of the $1.2 billion that New York State hands out in tax breaks to private industries each year, one item stood out: $621 million in subsidies for film and TV shoots that take place in the state. That means every man, woman, and child in New York shells out an average of $31 a year in public money into the coffers of studios and production companies.

...though both the city and state film offices provide data showing that the film industry has grown here since Governor George Pataki instituted the state’s tax credit program in 2004, economic experts aren’t so sure, pointing to other numbers that show that film and TV shoots don’t employ many more people in the state than they did fifteen years ago — and that any gain is nowhere near worth the hundreds of millions of dollars a year that the state pours into it.

And even if a positive impact does exist, New York’s film industry spending may just be a way of treading water: a zero-sum game where states compete to throw increasing amounts of tax money at the same number of jobs. It’s a problem that corporate-subsidy experts in other industries have dubbed “the economic war among the states” — and it serves mostly to funnel money out of public treasuries and into private pockets.

How could one set of numbers show that film tax credits have led to a huge boom in production jobs, while others show little to no effect? One issue is that the state’s audits separately report each job stint, no matter how short, rather than converting to “full-time equivalent” jobs — a tiny footnote in the Camoin study indicates that “if one person is employed part-time for four months, then takes two months off and is hired again for four months that would be counted as two jobs.” As a result, the official state numbers double- or triple-count crew members who work on multiple productions in one year.

Thom says that a study by the California legislature estimated that one-third of production activity in that state would take place in that state with or without subsidies. If the same ratio holds true in New York, then even if the state cut off the subsidy spigot and two-thirds of productions hightailed it to more budget-friendly climes, the state would still collect more than $250 million a year in tax revenues on an expense of zero dollars. With the current program running about a $100 million annual return by the state’s own figures, this implies that New York state would bring in about $150 million a year more in net revenues if it cut off film credits entirely — money it could conceivably then spend on more effective job-creation programs.