Last summer New Jersey made a strong bid to lure companies to produce movies and television shows in the state. Gov. Phil Murphy signed into law the New Jersey Film & Digital Media Tax Credit Program to give them a transferable tax credit on their corporate business tax and income tax if they film and create digital media content in New Jersey.
The credit can be 35% of qualified production expenses if the work is done in the state’s eight southernmost counties, compared to 30% in North Jersey. And if the companies submit an approved diversity plan and make a good-faith effort to achieve its goals, they can get another 2% credit.
There are plenty of reasons to be suspicious of government subsidies for businesses in general and those for film and TV productions in particular. Right now the state is embroiled in a dispute over tax incentives awarded by its Economic Development Authority.
Nearly 40 states try to entice film and TV companies with rebates, credits or grants. In the past few decades, companies based in California and New York have made maximizing such savings a central part of their production decisions.
States generally justify the expense by generously interpreting the economic benefits they get for the millions, sometimes billions, they spend. Jobs counted as created may last just days or weeks — an average 23 days for the film industry, according to a Michigan study. Lower paid service jobs dominate hiring, while highly paid and skilled production workers are brought in from New York and Los Angeles.
New York State spent $6.5 billion subsiding productions the past 15 years, and its development agency figured it had created more than 85,000 jobs in 2017-18 alone. The vast majority, though, were short-lived. Federal Bureau of Labor Statistics data show only 18,000 new film-related jobs in New York over 14 years.
Film and TV subsidies also can be misused. Louisiana reduced its program in 2015 after invoice charges were falsified and expenditures were laundered to look like movie expenses, leading to fraud charges.
So New Jersey and local officials need to exercise extra diligence and oversight of this particular subsidy. In some cases there won’t be enough bang for the tax bucks waived to get the shooting done in the Garden State.
But the appearance of tourism areas and attractions in movies and on TV shows can deliver value that is hard to measure.
The state Department of Community Affairs, which oversees Atlantic City’s finances, is right to be excited about increased interest in filming in the city since the tax credit program. Two major films are reportedly preparing to shoot there, a TV series wants to be set mostly there, and an independent film already has been shot in the city.
These have the potential to help people elsewhere see the progress the city is making. Perhaps the state, in deciding what productions qualify, can exercise a degree of the discretion shown by municipalities about what they support. Hamilton Township officials recently tabled a proposal to support possible work in Mays Landing on MTV’s “Jersey Shore Summer Vacation” until they got more information. Last year, Wildwood civic and business officials passed on the original “Jersey Shore” shooting there. That was their call, and the show went up the coast to film in Atlantic City.
Generally, though, appearing in major movies or TV shows is a positive for areas with a strong tourism component to their economies. And it also creates good feelings in local people when they see their community and its attractions are part of the American entertainment landscape.