I can’t stand crony capitalism. I have little tolerance for special subsidies and tax breaks being paid out to rent-seeking industries. So you can imagine that I’m not on board with what’s going on in New York because … holy crap.
Nearly two-dozen studios raked in more than $1.5 billion in rebates from New York over the past nine years as the state rapidly expanded its incentives to lure in movies and shows.
Indeed, no New York tax program is as generous as the one targeted toward the film and television industry, and records obtained by Gannett’s Albany Bureau shows that big-name studios reaped massive rewards for shooting in the Empire State.
NBC/Universal was by far the leader in rebates awarded between 2006 and 2014, getting back a whopping $320 million for up to 30 percent of its production costs to film in New York.
Sony/Columbia was refunded $200 million, while HBO got $198 million, the WB got $185 million and CBS received $171 million, the records obtained by Gannett through a Freedom of Information request showed.
The figures were staggering to critics of the program, who said the money should be used instead to help existing businesses in New York, particularly in regions trying to recover from decades of decline in manufacturing jobs.
Overall, $423 million was sent back to studios in 2014 – with the most, $117 million, returned to CBS, said Empire State Development, the state agency that runs the program.
Defenders of the program point to $8.7 billion in business Hollywood studios bring to the Empire State. But there’s no way that this possibly pays for itself. Hollywood mostly brings in its own people and its own experts. What’s the benefit to New York jobs? Selling the camera crews some Starbucks? And it’s not like if the tax benefits disappeared, Hollywood would stop making movies and TV shows in New York altogether.
And the benefits to New York businesses run into another problem. If Hollywood studios aren’t paying their taxes, that means someone else is. That means businesses that are native to New York, that are based in New York, that do all their business in New York have to make up the difference.
Here’s where the critics get it wrong. They think New York should be replacing those subsidies with other more targeted subsidies for upstate businesses. That’s better, I guess, in some weird sense. But here’s a better idea: just make taxes lower for everyone. Make New York friendly to all businesses, not just those that have some pull in Albany.
But … then you wouldn’t have Hollywood movie stars kissing up to politicians and making them feel important. Can’t have that, can we?