New York State Budget Boosts Film and Television Production

News Summary

Governor Kathy Hochul has signed a new state budget that increases funding for film and television production incentives to $800 million, introducing new provisions to attract independent projects. The budget includes a ‘Production Plus Program,’ adjustments to eligibility criteria for credits, and incentives for utilizing local talent. These enhancements aim to keep New York competitive against other states like California and New Jersey, amid concerns regarding the overall effectiveness of such incentives.

New York – Governor Kathy Hochul has officially signed the long-awaited New York State budget, which includes expanded incentives aimed at boosting film and television production within the state. The budget has received approval from both the State Assembly and Senate, marking a significant move to strengthen the state’s competitive edge in the entertainment industry. The new provisions are expected to be implemented immediately and will remain in effect through 2036.

The enhancements to the film and television incentives come on the heels of discussions regarding potential tariffs on content produced outside the United States, as proposed by former President Donald Trump. Meanwhile, California is also gearing up for a substantial expansion of its own film and television production incentives, highlighting an ongoing competition among states to attract and retain lucrative media projects.

The state budget has increased the annual allocation for film and television incentives from $700 million to $800 million, providing an additional $100 million to support independent projects. Independent projects are classified as productions where publicly traded companies do not hold 51% or more ownership. The allocation for independent projects will be divided into two funding categories: $20 million for films with budgets less than $10 million, and $80 million for those costing more than that threshold. Once the total allocation of $100 million is exhausted, no further applications will be accepted for that fiscal year, with independent production companies allowed to submit a maximum of two applications annually.

The newly enacted budget includes a range of provisions designed to enhance the appeal of New York as a filming destination. Key changes include the introduction of a Production Plus Program, which allows larger productions to receive an additional 10% increase in their incentive if they file two or more applications totaling qualified production costs of $100 million or more. Furthermore, the previous cap on Above-the-Line (ATL) labor costs has been eliminated, though the overall limit of 40% on Below-the-Line (BTL) costs remains in effect.

The budget also introduces modifications to the Post-Only Credit requirements, allowing productions to claim credits if 75% of their post-production budget or at least $1 million is spent in New York. For Visual Effects (VFX)/Animation projects, the eligibility criterion has been decreased from 20% of the budget or a minimum spend of $3 million to 10% or $500,000 spent in the state. These changes aim to alleviate delays that have historically plagued producers, permitting them to claim credits in the allocation year.

Additionally, music scoring costs will now qualify for an extra 10% incentive if five musicians are hired within New York State, enhancing the overall incentive structure for productions that utilize local talent.

These developments come as Pat Swinney Kaufman, the Commissioner of NYC’s Mayor’s Office of Media and Entertainment, commended the amendments for their role in maintaining New York’s competitiveness in the film production arena. The chairman and CEO of the Motion Picture Association emphasized that these adjustments are anticipated to further stimulate economic growth and job creation across the state.

The push to enhance New York’s filming programs is largely influenced by competition from other states like New Jersey and California, which are modernizing their own incentive frameworks to attract productions. California is proposing to increase its film subsidy cap from $330 million to $750 million while broadening the definition of qualified productions to include a wider range of projects.

Despite these advancements, some lawmakers have raised concerns, citing a recent state audit that indicates troubling questions regarding the overall effectiveness of film incentives and their return on investment. As New York legislators look toward future sessions, the sustainability of film tax incentives may come under close scrutiny, especially in light of ongoing budget constraints and evaluations of underperforming programs.

Deeper Dive: News & Info About This Topic

• Hollywood Reporter: New York Aims for Large-Scale Producers and Indie Projects
• Wikipedia: Film Industry in New York
• Deadline: New York Film and TV Production Incentives
• Encyclopedia Britannica: Film
• National Law Review: Governor Proposes Enhancements to New York Film Tax Incentive
• Google Search: New York Film Tax Incentives
• Variety: New York Film Tax Incentives Proposal
• Google Scholar: New York Film Incentives
• Times Union: NY’s Rethink on Tax Incentives
• Google News: New York Film Production Incentives