New York State gives out over $1 billion in tax incentives and credits every year to create and retain jobs and bolster the economy.
But do they work?
A new report released Tuesday shows that for some programs targeted toward manufacturing and scientific research development, the incentives do work.
But for others, like those for the motion picture and theater industries, the state is losing way more than it’s paying out.
New York has poured more than $4.6 billion in incentives into the film and television industry over the last decade.
However, the auditors found that while the Film Production and Post-Production Credits have supported well over 100,000 jobs, they don’t provide a positive return for the state’s investments when it comes to direct revenue.
“Each dollar in foregone revenue returns $0.15 based on direct taxes to the state, or, including indirect and induced effects, a return of $0.31 on the dollar,” the report said.
State Sen. Sean Ryan (D-Buffalo) was among legislators who pushed to have the independent audit included in the 2022-2023 state budget.
He wants the report to help lawmakers and taxpayers see which economic development efforts work and which are a waste of money and time.
“We are spending billions of dollars of state resources each year under this idea of promoting economic development,” Ryan told 7 News. "Under this idea of promoting economic development but the state never stopped to see which programs are effective or how to measure effectiveness.”
He pointed to the state’s nearly $1 billion investment in what is now the Tesla plant.
“We haven’t gotten a great return on that investment,” Ryan said. “That helped wake up a lot of people to realize boy… we are spending a lot of money.”
Ken Girardin, research director at the Albany-based Empire Center for Public Policy, called the report “a pretty damning indictment of the way state lawmakers and governors going back more than two decades have been spending public money in trying to encourage particular industries in New York.”
Subsidies for film and television are of particular concern, Girardin said.
He highlighted the practice of providing recurring incentives to ongoing TV shows – and whether productions would really leave New York for elsewhere.
“You’re subsidizing things like ‘Saturday Night Live’ which wasn’t going to move to another state,” Girardin said.
The report does point out that the incentives are likely bringing productions to areas outside of New York City that wouldn’t otherwise be landing them. Western New York has welcomed many productions in recent years including “Nightmare Alley,” “Marshall” and “A Quiet Place II.”
To stop the waste, Ryan is proposing reforms, including promoting the programs that are working and getting rid of those that aren't.
You can read the full report here.
