N.J. remains a Hollywood backlot, despite end to tax credits


By Ted Sherman | NJ Advance Media for NJ.com

TRENTON —Last month, New Jersey killed a tax credit program offering lucrative tax breaks and incentives aimed at luring Hollywood productions to the Garden State.

There apparently will be no sequel.

While the state Senate approved a measure more than a year ago to appropriate $50 million in new inducements for film production, the bill remains bottled up in committee in the Assembly. At the same time, Gov. Chris Christie—who killed a $420,000 credit in 2011 for the hit MTV show “Jersey Shore,” arguing it tarnished the state’s reputation—has already vetoed a previous attempt to expand the creditsand has shown little enthusiasm for bringing them back.

State Sen. Raymond Lesniak (D-Union), one of the sponsors to revive the incentives, said tax credits have become a dirty word in the Legislature. “When Christie let the tax credits expire, all the production jobs left the state,” he said.

But state officials say even with the end of incentives, New Jersey continues to be a major film backdrop in productions large and small.

“I don’t sense any drop off. We have a few bigger projects this year than we did last year,” said Steven Gorelick, executive director of the New Jersey Motion Picture and Television Commission.

Later this year, director Clint Eastwood will begin filming in New Jersey for his latest movie, “Sully,” an account of the pilot who landed his crippled jetliner on the Hudson River without any loss of life.

Gorelick said Bill Murray is set to star in a film about a bus driver poet, which will be shot in Paterson.

“Red Oaks,” starring Paul Reiser and Jennifer Grey—an Amazon Studios comedy series produced by Picrow set in a prestigious and exclusive country club—is using the Edgewood Country Club in River Vale as its set.

Many big budget movies shot here in recent years never even qualified for state incentives—they were here just for the view. The credits required at least 60 percent of a project’s total expenses be spent in New Jersey. While scenes of the form version of Broadway’s “Jersey Boys” were shot in Newark, Kearny and Boonton,  producers never sought New Jersey tax credits, according to Gorelick.

Linda Coles-Kauffman, who is responsible for state marketing at the New Jersey Department of State, said film companies have come to New Jersey “for years and years” because the state is a desirable location.

“Do incentives sweeten the pot? Of course. But that’s not the only reason productions come here,” she said.

Economic lure

New Jersey’s former film incentives offered a 20 percent tax credit on production expenses, but were capped at $10 million annually—limiting the total funding available to producers each year. That effectively ended the state’s incentive program long before it officially ended on July 1. The program ran out of money months before July.

New Jersey continues to offer a sales tax exemption for goods and services purchased for film production. The state also has 37 film studios and Gorelick’s agency publishes a production services directory listing 797 business providing everything from catering and crew to props and costume houses located in New Jersey.

Gorelick said “Jersey Shore” notwithstanding, New Jersey also remains home to an increasing number of reality television productions—which he pointed out never received tax credits here, and are not incentivized anywhere in the country.

“A lot of them are home improvement shows,” he remarked. ” Any kind of reality show you can imagine.”

“Ink Master,” the Spike TV tattoo competition series, films in the Ironbound Film & TV Studios in Newark. “Cake Boss” continues its run at Carlo’s Bake Shop in Hoboken. AMC films Kevin Smith’s Comic Book Men in Red Bank.

Other states, meanwhile, have also been moving to shutting down film incentive programs in recent months, questioning whether the glitz and glamour of the film industry is worth the cost of admission.

Michigan ended its incentive program in July as well. Louisiana, one of the first states to dangle very generous tax credits in front of producers more than a decade ago—bringing in a number of major studio productions, while setting off a rush across the country offer some form of incentives to filmmakers—has put a cap on the program, citing the state’s budget problems. Florida’s program has run out of money.

The Motion Picture Association of American says film and television incentive programs create jobs and economic opportunities, citing 29,000 jobs and $6.9 billion in economic benefits in New York. The industry group said the production of “Captain America: The First Avenger” brought to Ohio $31 million in spending.

However, Scott Drenkard, an economist and manager of state projects for the Tax Foundation—a Washington-based nonpartisan tax research group—said film tax credits have been oversold, and provide no sound economic benefits.

“Is it worth it to pour resources that benefit just one small sector of the American economy?” he asked. “They don’t provide permanent jobs. It’s a subsidy program for film producers.”

Drenkard said the credit programs are popular across the country only because it’s Hollywood.

“I think its optically beneficial for politicians,” he said. “There’s a feeling it’s a little sexy to be doing something like this.”

http://www.nj.com/news/index.ssf/2015/08/nj_remains_a_hollywood_backlot_despite_end_to_tax.html

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