Counties want state to sweeten the tax film credit

New York's tax breaks for making movies and TV shows in the state aren't keeping up with what the neighbors have to offer.

That's the message that county lawmakers from the Lower Hudson Valley and elsewhere in the state are sending to Albany this week in a resolution calling for a review and overhaul of New York's tax-credit program for film and TV productions.

The 15-member board of the New York State Association of Counties voted unanimously last week to put the film tax-credit program on its 2008 legislative agenda.

"New York State has lost both jobs and revenue because of its antiquated, noncompetitive tax credit policy," the resolution stated.

New York's 10 percent tax credit - plus an extra 5 percent in the five boroughs - can't compete with more generous incentives in adjacent states, said William Ryan, chairman of the Westchester Board of Legislators and a leading voice calling for an increase in the film tax credit.

Since Connecticut enacted a 30 percent tax break in July 2006, film and TV production companies have spent more than $400 million in the state - up from just $1 million in the first six months of 2006.

More than two dozen movies were filmed in Connecticut this year. Director Steven Spielberg and stars such as John Travolta and Leonardo DiCaprio spent parts of their summer in the Nutmeg State.

Other states bordering New York also have more generous credits, including New Jersey (20 percent), Massachusetts and Pennsylvania (both 25 percent).

"It's necessary to send a message to the governor and Legislature through this resolution that they have to take steps to bring us into a competitive position," Ryan said.

In Westchester County alone, there has been a steep decline in movie production. This year, just two major studio movies were filmed in the county, down from 13 in 2006.

New York, the No. 2 state for film and TV production behind California, has lost about $700 million worth of business since Connecticut passed the tax credit, said Elizabeth Nostrand, legislative and policy director for Assemblyman Steven C. Engelbright of Long Island.

Engelbright, who was recently named chairman of the Tourism, Arts and Sports Development Committee, is crafting legislation that will improve New York's incentive program, Nostrand said, although there are no details on specific plans yet.

"You're talking three-quarters of a billion dollars. This is a high priority," Nostrand said.

Ryan said he hopes the association's resolution will encourage swift action by lawmakers.

"We're not looking for something to be discussed for a year or two and have something implemented down the road. We'd like to see it in budget talks in January, passed in March and a new program implemented immediately," he said.

Stephen J. Acquario, the executive director of the Association of Counties, said the association hopes to be a catalyst for change. The only significant update to New York's incentive program since it was passed in 2004 was an increase in the yearly cap on credits to $60 million in 2006.

"We need to shake things up and see what makes sense today," Acquario said.

Resolutions of the Association of Counties have triggered action in the past, Ryan said, citing last year's call for a cap on local Medicaid expenses. The local share to Westchester taxpayers for Medicaid expenses this year would have been $201 million without the cap, Ryan said.

"Because of our efforts to talk to the Legislature and the governor and make this a formal priority of NYSAC, this year our Medicaid expenses were $185 million, which represented close to a $16 million savings for local taxpayers," he said.

Several state lawmakers from the Lower Hudson Valley said they support the push to increase the film incentive, because the industry is valuable to the region as a creator of jobs and driver for tourism.

"We want film production here in our state, and we don't want to lose the ancillary revenue," said Assemblywoman Sandy Galef, D-Ossining.

Assemblyman Adam Bradley, D-White Plains, said New York must be competitive with tax incentives to retain its reputation as an entertainment capital.

"Every business, every industry, takes advantage of the incentives available to them, and if New York is not competitive, they have every reason to go to a place that is going to provide them with inducements and incentives," he said.

Bradley, whose district includes northern Westchester towns where stars such as Richard Gere and Susan Sarandon make their homes, said the Empire State's desirability as a location to Hollywood talent isn't in question.

"I think if we are competitive, people are going to want to stay here," he said.

State Sen. Vincent Leibell, R-Patterson, said he would like to see the incentives sweetened to attract producers who might otherwise choose to make their movies in Connecticut, Canada or even overseas.

"This is a very mobile industry that can easily shift to another setting. It can easily go to another state or another country. It's very profitable if they are made here. It's worthwhile for us to give them a tax incentive," he said.

If a new law is passed swiftly, the effect could come as early as the summer in the form of new movie shoots in the state, Ryan said.

"The industry will be very quick to understand that there is a change, and they will be very quick to build that into their cost projections for production and see how that would affect their bottom line favorably, and they will make the decision to do their work in New York," he said.