Crony Capitalism

New York Refuses To Divulge How Much It Subsidizes Specific Movies

Want to know how much of your money paid for Best Picture-winner Birdman? Too bad!

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||| Filming/flickr

If politicians are going to take your money and give it to billion-dollar Hollywood studios, the least they can do is tell you how much they're actually handing out.

According to The New York Post, the state of New York won't even provide that courtesy. New York forks over the most money of any state, with a cap of $420 million in taxpayer money annually going to film studios—a total of over $1.5 billion since 2006.

The state legislature has ordered Empire State Development (ESD), which runs the film subsidy program, to disclose specific tax credit figures for each production, but ESD has refused to provide that information, claiming it takes years to calculate the final subsidy totals.

This claim is eyebrow-raising, as the state with the second-largest tax break total, California, lists such information on its website every year. (When you can point to California as a paradigm of government transparency, you know you have issues, New York.)

Research has shown that for every tax dollar lost in revenue to film tax credits, benefiting productions generate less than 30 cents in economic activity. According to the Post, many of the credits given to this year's Oscar Best Picture–winner Birdman were not so much even reductions in taxes as they were merely cash grants.

Star-struck politicians often attempt to justify these crony deals by claiming studios wouldn't film in their states without them, and that the subsidies bring jobs. As Michigan and many other states have shown, though, these policies have had laughably negligible effects on jobs and instead merely line the coffers of Hollywood studios at the expense of local taxpayers.

New York doesn't even follow this line of thought, though. The state gave out massive subsidies to NBC's "Tonight Show" and CBS's "Late Show" despite neither giving any indication it would leave New York without them.

Luckily, New York is part of what seems to be a shrinking number of states offering film tax credits. In 2010, 40 states doled out $1.4 billion in such arrangements. Last year, only 32 states had such programs in place.

In her acceptance speech for Best Supporting Actress at Sunday's Academy Awards, Patricia Arquette gave a shout out to "every taxpayer and citizen of this nation." They certainly deserved it, since a good chunk of nearly every American production was paid for on their dime.

NEXT: The sound of the government retreating

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    1. I don’t work from home for less than $100 and hour.

      1. And I won’t for anything less than 200 quatloos!

      2. I bill $125, but don’t get that many hours.

  2. You know the problem I had with Birdman? It’s another movie that is, for all intents and purposes, about making a fucking movie.

    It’s like a book about a guy writing a book.

    1. It’s like a book about a guy writing a book.

      Isn’t that the plot to Misery?

      1. yes- sort of. Birdman was better than that though.

        1. Does not compute.

    2. A play inside of a play.

      The Producers.

      1. I think Hamlet beat ’em to that by a little. Come to think of it, aren’t about half of all musicals like that?

        See also SCTV‘s “I Cry Each Day I Die”.

  3. Maybe I’m just cynical, but my guess is that politicians go for this because, well, it’s glamorous. They get to meet “the beautiful people” and play the star’s life. Sure as hell beats going over budget numbers or getting chewed out by some old lady who thinks there’s too many potholes on the road near her house.

    Then along come snakeoil salesmen like Richard Florida telling them that that’s the key to long-term prosperity, and their only too eager to believe it.

    1. Yes, that’s definitely it, same as with sports stadiums. But it’s not just politicians, it’s also many of their constituents in the case of sports; not so much in the case of screen prod’n, though, where it just ties up pedestrian & sometimes vehicle traffic & is excruciatingly boring compared to the final product.

      Well, glamor + the prestige that comes with it.

    2. In addition to feeling like a movie star, film subsidies look good when it comes to the job creation numbers.

      The movie industry is highly mobile, always has been, just dangle the money in front of them and they’ll roll up in their white trucks and shoot a movie with your state/country as a backdrop.

      No pesky waiting around for factories or other permanent infrastructure to be built.

      You’ll often see claims like “this movie created 4000 jobs!”, but if you actually look at the numbers, you realize that 90% of them are short term low paid work for extras who make up the bulk of the crew, then about 5% are jobs for locals that pay ok, then the last 5% (which also accounts for 70% of the budget) is the above the line cast & crew who are all based in California.

      Essentially states are spending hundreds of millions of dollars temporarily employing Mall Santas, anyone who earns a decent paycheck flies back to California after the two month shoot and takes the vast majority of their money with them.

  4. To play devil’s advocate, tax credits for temporary affairs like movies are almost freebies. It’s not hard to see the foregone taxes as something you wouldn’t see anyway if the movie were produced in some other area. It’s a tragedy of the commons kind of thing — if all states stopped waiving taxes, it would be the same as all states waiving taxes.

    Cash grants or other direct subsidies, now that’s stupid.

    1. If you get some marginal tax revenue from a temporary gig like this, I can see it. But refundable tax credits? WTF? No, no, no.

    2. That’s true. I’m all for tax credits for anything, no matter how narrowly targeted, unless they’re refundable credits. I even favor refundable credits in cases where the refunds make up only a small part of the total & it cuts administrative costs to not separate true tax refunds from net payouts.

    3. Nearly all film subsidies (certainly in all the big states and other countries) take the form of refundable or transferable tax credits.

      They pay out far more than anyone actually pays in taxes, they’re usually around a quarter to a third of the total budget.

      These aren’t tax cuts, these are not even close to tax cuts.

      1. This.

        Much of independent film is nothing more than subsidy farming. It’s a pretty lucrative racket too. In Europe (Britain especially) it can make producers multi-multi-millionaires producing movies that are total commercial flops. I vaguely remember it being a big whoopty-do 20-25 years ago in Britain and the UK film council being reorganized to use lottery money instead of actual treasury money, but I could be mistaken.

  5. Yeah, they made some movies in my town. Thanks, Michigan film subsidies! For that, they rented the unneeded extra high school that opened – then closed, oops – a couple years ago, and spent a LOT of money at the party store (that’s Michigander for “bodega” or “convenience store” or “liquor store that also sells some sammiches and beef jerky).

    That was about it. Cost the state a few million dollars. It was a shitty movie.

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