There are good reasons state officials might think New Jersey ought to be in pictures. It’s located in the media-intensive Northeast, its image could use some work, and its economy sure could use another industry.
In 2018 they started offering tax incentives to encourage movie and TV production companies to work in New Jersey.
The tax breaks quickly paid off in some high-profile entertainments. The blockbuster movie “The Joker,” nominated for 11 Academy Awards, did substantial filming in Newark. Steven Spielberg filmed his remake of “West Side Story” in Paterson.
South Jersey has seen a good share of the action. Zack Snyder is shooting “Army of the Dead,” with “Guardians of the Galaxy” star Dave Bautista, in Atlantic City. The resort was also the location for “Atlantic City Story,” starring Jessica Hecht.
Encouraged by these results, a bipartisan effort this month increased the amount of tax incentives available and extended the Garden State Film and Digital Media Jobs Act all the way to 2028.
Gov. Phil Murphy strongly supported the expanded effort, even though for the past year he has attacked other state tax credits for businesses and let them expire. He said production companies that choose New Jersey bring “skilled jobs and economic activity with them.”
State Sen. Chris Brown was an early advocate of film and TV tax credits, proposing them at a 2014 summit in Atlantic City. He said they’re necessary to offset the state’s high taxes that “forced the movie industry and the jobs they create to find other locations.”
“The Army of the Dead” alone “hired over 300 local families because of this tax credit,” Brown said, helping to diversify the local economy.
Critics such as the Center for American Progress say the benefits often aren’t worth the money spent. World Wrestling Entertainment, for example, was awarded a $2.9 million tax break to hold a single event, Wrestlemania 35, at MetLife Stadium in East Rutherford.
NBC’s “The Enemy Within,” which earned an $11.2 million tax credit, was canceled after one season last year.
The program expansion increases the annual cap on movie and TV tax credits available from $75 million to $100 million.
In its first two years combined, however, the program issued just $59.5 million in credits. Even though the new law also allows unused credits to be added to what’s available the next year, the actual cost to the state may be less than expected. Film companies must spend at least 60% of their production budgets in New Jersey to receive tax breaks.
South Jersey continues to benefit from higher incentives under the program. Filming in Atlantic, Burlington, Camden, Cape May, Cumberland, Gloucester, Mercer or Salem counties yields a credit up to 35% of expenses, compared to 30% in counties to the north.
Are these subsidies worthwhile? Maybe ... it depends ... and perhaps only temporarily.
Two studios are being built, in Harrison and Jersey City, and the ability to count on the tax credit program through 2028 might encourage other long-term plans. With its proximity to New York and its central East Coast location, New Jersey has natural advantages for the entertainment industry.
Last year, film and TV productions spent more than $300 million while filming in the state, according to the N.J. Motion Picture and Television Commission, five times what they did in 2017.
Even if the program doesn’t result in a significant and sustainable industry, its mixed benefits plus the unquantifiable improvement to New Jersey’s image could be enough to justify it.
Image marketing is often best done periodically, though, so maybe New Jersey will eventually rethink film and TV subsidies as a dozen other states have done.