Economic Impact of the Film Industry

in New York State - 2015 & 2016

Prepared for: Empire State Development

1
About Camoin
Camoin Associates has provided attention from national media outlets
economic development consulting including Marketplace (NPR), Forbes
services to municipalities, economic Magazine, and The Wall Street Journal.
development agencies, and private Additionally, our marketing strategies
enterprises since 1999. Through the have helped our clients gain both national
services offered, Camoin Associates has and local media coverage for their
had the opportunity to serve EDOs and projects in order to build public support
local and state governments from and leverage additional funding. We are
Maine to California; corporations and based in Saratoga Springs, NY, with
organizations that include Lowes Home regional ofces in Portland, ME; Boston,
Improvement, FedEx, Volvo (Nova Bus), MA; Richmond, VA; and Brattleboro, VT.
and the New York Islanders; as well as
To learn more about our experience and
private developers proposing projects in
projects in all of our service lines, please visit
excess of $600 million.
us online at camoinassociates.com. You can
Our reputation for detailed, place- also nd us on Twitter (@CamoinAssociate)
specic, and accurate analysis has led to and on Facebook.
projects in 29 states and garnered

Cover photo: HBO/Cinemaxs The Knick: Michael Angarano, Juliet

Rylance, Steven Soderbergh, Greg Jacobs. Photo: Mary Cybulski

i Economic & Fiscal Impact Analysis of New York State Film Tax Credit Programs | January 2017
Table of
Contents
01 Executive Summary

04 Introduction

04 Background

05 Literature Review

06 Data Analysis

07 Interview Findings

09 Economic Impact of the Film Industry

20 Fiscal Impact of the Film Industry

24 Attachment A: What is an Economic Impact Analysis?

25 Attachment B: References

27 Attachment C: Additional Research

Economic & Fiscal Impact Analysis of New York State Film Tax Credit Programs | January 2017 ii
 Total Impact on New York State (2015 & 2016)

JOBS
DIRECT
TOTAL:
34,209
36,603
INDIRECT

70,812
EARNINGS
TOTAL:
DIRECT

$2,001,312,675

$4,222,769,745
INDIRECT

$2,221,457,070

SPENDING
TOTAL:
DIRECT

$6,543,232,139

$12,586,290,898
INDIRECT

$6,043,058,760
I, Camoin Associates
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iii Economic & Fiscal Impact Analysis of New York State Film Tax Credit Programs | January 2017
Executive
The rst step of the analysis was to conduct substantial
research into the lm industry and understand how the

Summary
tax credit program impacts lming location decisions.
This research included interviews, literature review, data
analysis, and reviews of similar reports on the subject.
The ndings of this research overwhelmingly supported
Introduction the notion that the tax credit program in NYS has been
Empire State Development (ESD) administers the a driver of economic activity in the lm industry including
New York State Film Tax Credit Program, a program not only the attraction of major lm and television
rst established in 2004 and designed to increase the productions but also the construction and operation of
lm and television production and post-production new sound stages and the improvement of the workforce
industry presence in New York State, and to provide and talent necessary for a world-class lm industry
an overall positive impact to the States economy. The cluster. Furthermore, the research found that without
Program provides tax credit incentives to qualied the tax credit program, NYS would lose industry activity
production companies that produce feature lms, to other states that offer incentives since the industry
television series, television pilots and lms for television, is highly mobile and price sensitive.
and/or incur post-production costs associated with
these productions to support the growth of the lm Findings
industry in New York State. As part of the law that Economic Impact Analysis
extended the program in 2013, ESD is required to
An economic impact analysis looks at how direct
have a third party review the impact of the program
spending resulting from a particular industry or project
on a biennial basis to calculate the economic and scal
has multiplier impacts throughout the economy
impact of the States investment. Camoin Associates
and results in new jobs, earnings, and spending. The
was hired through a competitive bid process by ESD
direct impact of this project was the production and
to complete this review for years 2015 and 2016. What
post-production spending in New York State by credit-
follows is a summary of this analysis with more detail
eligible projects produced during 2015 and 2016.
in the full report.1
Table 1 summarizes the combined impact of the Film

Background Production Tax Credit and the Post-Production Tax

Credit during years 2015 and 2016.
New York offers tax incentives to encourage the growth
of the lm industry in the state through two separate In total, the Film Production Tax Credit and the Post-
programs: the Film Production Credit and the Post- Production Tax Credit program generated over $6.5
Production Credit. Both of these programs encourage the billion in spending in New York State over the two-year
use of New York State (NYS) facilities and offer substantial period of 2015 and 2016. The $6,543,232,139 in direct
tax incentives on industry spending in the state. The spending resulted in 70,812 total jobs2, $4.2 billion in
incentives available in NYS are not unique, and a majority earnings, and over $12.5 billion in total spending
of states offer some kind of incentive program of various throughout the New York State economy.3 As noted,
magnitudes. Based on interviews with industry experts, these impacts cover a two-year period (20152016).
these tax incentive programs have been successful at Therefore, to annualize the impacts, we simply divide by
attracting and retaining the lm industry because costs, 2 to nd that collectively, the credits directly supported
net of incentives, have become the number one driver over 35,000 jobs each year, $2.1 billion in earnings each
of location decisions for lm productions. year, and almost $6.3 billion in spending per year in NYS.

1
Camoin Associates also completed the 2013/2014 impact analysis. part-time for four months, then takes two months off and is hired again for four months
2
A job is equal to one person employed for some amount of time (part-time, full-time, that would be counted as two jobs.
or temporary) during 2015 or 2016. For example, if a person is employed full-time in 2015 3
Note that the earnings impact is also captured in the spending impact. As the production
and 2016 that would be considered two jobs. Another example is if one person is employed companies spend money on labor they are creating additional earnings.

Economic & Fiscal Impact Analysis of New York State Film Tax Credit Programs | January 2017 1
 Table 1: Production & Post Production Credit -
Total Economic Impact on New York State (2015 & 2016)

Direct Indirect Total

Jobs 34,209 36,603 70,812
Earnings $2,001,312,675 $2,221,457,070 $4,222,769,745
Spending $6,543,232,139 $6,043,058,760 $12,586,290,898
Source: Empire State Development, EMSI, Camoin Associates

Additional Impacts All of this visitation generates revenue and employment

that otherwise would not exist without the locations
The New York State lm industry tax credit programs
connection to the lm industry.
have an impact beyond just what is calculated in the
above sections. These additional impacts include: (a) Fiscal Impact Analysis
support of lm industry cluster-specic workforce and
The lm industry not only impacts the NYS economy in
infrastructure development, and (b) lm production
terms of jobs, earnings, and spending but there is also
induced tourism. These impacts are not accounted for
a scal impact on both NYS and New York City (NYC) in
in the above economic impact calculations, but
terms of direct and indirect tax revenue. The analysis
nevertheless have an impact on the lm industry and
used the ndings of the economic impact analysis to
the NYS economy.
calculate how this activity results in additional tax
Film Industry Cluster Effect Because of the signicant revenue for NYS, NYC, and other local jurisdictions.
cluster of lm-related industries in New York, there exists Based on the activity that was associated with the lm
a virtuous, self-reinforcing cycle where businesses, industry during 2015 and 2016, it is estimated that NYS,
workers, and infrastructure serve to perpetuate the NYC, and other local jurisdictions received nearly $1.5
advantages of producing in New York. For example, as billion in additional tax revenue from the Film Production
more productions occur in NYS, there are more Tax Credit activity and NYS, NYC, and other local
employment opportunities, the skill levels of the overall jurisdictions received an additional $54 million from the
workforce are improved, and the industry as a whole Post-Production Tax Credit activity.
benets. As a result of this cluster effect, additional
production activity, beyond that which is directly
Table 2: Tax Credits Issued
incentivized by the tax credit program, is occurring in
NYS. Without the tax credit, this non-incentivized activity Production Credits $1,388,161,657
could begin to decline over time.
Post-Production Credits $59,753,414
Film Production Induced Tourism Film-induced Total $1,447,915,071
tourism can take a number of different forms ranging Source: Empire State Development
from tourists extending their stay in a particular place
to visit different sites featured in a movie or television An essential question of this analysis is: How do the tax
show, to distinct visits to a location or country to see revenues that are generated by the lm production tax
where the lm was made, to visitors traveling to see credits compare to the amount of tax credits that are
where a lm or television show is currently being made. issued in order to incentivize? In other words, what is

2 Economic & Fiscal Impact Analysis of New York State Film Tax Credit Programs | January 2017
 Table 3: Production Credit - Table 4: Post-Production Credit -
Return on Investment Return on Investment

New York State New York State

$659,811,901 Tax Collections
$23,591,081
Tax Collections

New York City Tax Collections $726,796,603 New York City Tax Collections $28,674,095
All Other NYS Local Govt Tax All Other NYS Local Govt Tax
$111,232,491 Collections
$2,055,230
Collections

Combined Tax Collection $1,497,840,995 Combined Tax Collection $54,320,406

NPV of Estimated Production NPV of Estimated Production
$1,298,902,333 Credit Payout
$56,227,345
Credit Payout

Return on Investment Ratio 1.15 Return on Investment Ratio 0.97

Source: Camoin Associates Source: Camoin Associates

the states return on investment (ROI) of the tax credit Conclusion

program? For the production and post-production
During the 20152016 study period NYS invested a
activity during the 20152016 period the state offered
total of $1,355,129,678 (net present value) in incentives
over $1.4 billion in incentives, to be paid out over several
through the Production Tax Credit and the Post-
years following the completion of the projects (Table 2).
Production Tax Credit to be paid out over a period
Table 3 compares the NYS, NYC, and other local from 2016 to 2020. In exchange, NYS, NYC, and local
jurisdiction tax collections associated with the jurisdictions will directly receive $1,552,161,401 in total
production credit to the net present value (NPV) of the tax revenue while supporting over 35,000 jobs per year,
production credit payout. The NPV is used because $2.1 billion in earnings per year, and nearly $6.3 billion
the tax collections from the industry spending and in spending throughout New York State per year.
employment is occurring during the 2015/2016-time
period whereas the tax credits are paid out over a period
of several years that will extend beyond 2016. When
combining the tax benets that accrue to NYS, NYC,
and other New York local governments, the ROI ratio for
the production credit is 1.15. In other words, for every
$1 NYS pays in incentives, NYC receives about $0.56,
other local jurisdictions receive $0.09, and NYS receives
$0.51 in tax revenue.

Similarly, for the post-production credit, Table 4 compares

the projected tax collections associated with the post-
production activity to the projected post-production
credit payout. The ROI for the post-production credit
is 0.97, meaning that for every $1 of tax credits issued,
NYC receives $0.51, other local jurisdictions receive
$0.04, and NYS receives $0.42 in tax revenue.

Economic & Fiscal Impact Analysis of New York State Film Tax Credit Programs | January 2017 3
 Introduction Film Production Credit
The Film Production Credit is
Empire State Development (ESD) administers the New available to offset qualied
York State Film Tax Credit Program, a program rst production costs which generally
include below-the-line items.
established in 2004 and designed to increase the lm
Eligibility for the credit varies based on a number of
and television production and post-production industry factors including the budget for the production and
presence in New York State, and to provide an overall the type of lm company (i.e. major studio versus
positive impact to the States economy. The Program independent lm company).

provides tax credit incentives to qualied production Post-Production Credit

companies that produce feature lms, television The Post-Production Credit (post-production) is available
series, television pilots and lms for television, and/ to lm production companies that lm a substantial
or incur post-production costs associated with these portion of a project outside of NYS, but do some or
all of their post-production work in the state. Note that
productions to support the growth of the lm industry productions that qualify under the Film Production
in New York State. As part of the law that extended the Credit can claim their post-production costs under the
program in 2013, ESD is required to have a third party Film Production Credit.

review the impact of the program on a biennial basis to

calculate the economic and scal impact of the States
investment. Camoin Associates was hired by ESD to

Background
complete this review for years 2015 and 2016.4

In order to complete this analysis Camoin Associates

conducted signicant research including a review of
existing literature on the topic, industry data collection Overview of the New York State
and analysis, and interviews with experts in the lm Film Tax Credit Program
industry in New York State (NYS). This background
First established in 2004, the NYS Film Tax Credit
research proved to be exceedingly helpful to not only
Program5 is designed to encourage and support the
understand the industry but also to determine the
lm industry in New York State and increase its presence
importance of the tax credit program in the attraction
and overall impact on the state economy. The original
and retention of the lm industry in NYS.
legislation offered a 10% credit on qualied below-
The following report provides background on the tax the-line6 expenditures. In 2008, the program was
credit programs, calculates and analyzes the economic extended and expanded to a 30% credit on below-the-
and scal impact of the program in NYS, and nally line expenditures. The program has been extended a
estimates the return on investment (ROI) ratio for number of times, most recently for the period of 2015
the State that compares the annual investment in 2019. The current regulations for the program make
the credit (amount of credits issued) to the annual benets eligible for production and post-production
income that the state receives (amount of tax revenue costs including a fully refundable credit of 30% (additional
generated by the industry). benets available to projects in NYS but outside of New

4
Camoin Associates also completed the 2013/2014 impact analysis. from $7 million/year for years 2010-2014 to $25 million/year for years 2015-2019. Finally,
5
The Empire State Film Production Credit was rst enacted in 2004 (Chapter 60) and was beginning in 2015, lm companies are eligible for an additional 10% credit for labor costs
subsequently amended several times to either increase and extend program funding or incurred in certain upstate counties.
to increase the amount of credit for a project (e.g. 10% to 30% of qualied costs). In 2010, 6
Below-the-line expenditures include costs for technical and crew production, use of
the Empire State Post Production Tax Credit was created. Total funding authorized as the lm production facilities, props, makeup, wardrobe, non-speaking background extras, lm
rst pool of program funds is $1.035 billion for tax years 2004 to 2013. An additional pool processing, camera, sound recording, set construction, lighting, shooting, editing, and
of $3.78 billion of funds were authorized for tax years 2010 through 2019 ($420 million/ meals. They exclude costs such as compensation for the screenwriter, producer, director,
year). The post-production tax credit is nanced out of the additional pool ($420 million/ principal actors, and expenditures on rights to secure the material on which the script is
year) and the amount of the funds dedicated to post-production projects were increased based and production rights to the screenplay.

4 Economic & Fiscal Impact Analysis of New York State Film Tax Credit Programs | January 2017
 Literature
York City7) of qualied production and post-production
costs incurred in NYS. New York State has set aside $420

Review
million per year to be allocated towards this credit. The
credits received by a lm company are paid out over a
period of 1 to 3 years following production, depending
on production timing and budget.
As part of the research process, Camoin Associates
In order to receive either of the tax credits, lm reviewed dozens of reports and articles on the lm
companies must submit documentation throughout industry and the associated incentive programs in
the process including an initial application that outlines New York State and throughout the United States. This
their projections for qualied spending and a nal research provided us with an in-depth understanding of
application once the project is complete. Ultimately how and why the tax credit programs came to be and the
the full project is audited to determine the actual credit role that they play in growing the lm industry in places
amount. Administration of the program is handled by outside of the traditional United States powerhouses
Empire State Development. of New York and California.

Other Film Industry Previous Reports on the

Incentive Programs Impact on New York State
New York States incentive program for the lm industry Two previous studies
is not unique. A 2014 study issued by the National have been completed
Conference of State Legislatures reported that thirty- to analyze the impact of
nine states and Puerto Rico offer lm production the tax credit program on
incentives.8 The incentives available for the lm industry New York State, including
started to take root in the 1990s with Louisiana passing a report prepared in
the Motion Picture Investor Tax Credit.9 In the early February 2009 by Ernst &
2000s only a handful of states offered similar programs Young for the New York
but the number of states with lm incentives increased State Governors Ofce
dramatically by 2010 as states began to compete in of Motion Picture and
earnest with each other. Incentives to the lm industry Television Development
vary widely from state to state but some of the key and the Motion Picture Association of America (Ernst
differences are that some states offer incentives on & Young Report) and a subsequent update report
above-the-line costs, which NYS does not do, and completed in December 2012 by HR&A Advisors for
some offer cash rebates rather than refundable tax the Motion Picture Association of America (HR&A
credits. Additionally, other countries have signicant Report). Both reports looked at the economic and
incentives that draw productions out of the United scal impact of the New York State Film Production
States to places like Toronto, Vancouver, London, Tax Credit and compared the scal benets to the cost
Turkey, Australia and throughout the world. Prior to associated with the program (lost tax revenue resulting
credits being available in NYS, many lms set in New from the credit).10
York were primarily shot in foreign locations (Toronto
in particular) with the crew coming to New York for The most recent study prepared by HR&A Advisors
a short time to shoot key location shots such as the found that in 2011 the Film Production Tax Credit
Empire State Building, Times Square, the New York supported 28,000 jobs (including 12,600 direct jobs
City skyline, and the Statute of Liberty. and 16,300 indirect jobs), $6.9 billion in sales, and

7
Effective January 1, 2015 an additional 10% credit was added to the Film Production Tax 8
National Conference of State Legislatures, 2014)
Credit to productions with a total budget greater than $500,000 that are using labor from 9
Adkisson, 2013
a set of counties outside of NYC. Since this change, the State has issued the extra credit
to one production and there are 14 others that are still in the initial application phase with
expected spending of nearly $9,250,000 upstate.

Economic & Fiscal Impact Analysis of New York State Film Tax Credit Programs | January 2017 5
 $4.2 billion in wages per year. Additionally, the Film Major takeaways of the literature review:
Production Tax Credit generated $748 million (New
The vast majority of the lm industry is highly
York State and New York City taxes) in taxes while
mobile and able to relocate productions relatively
distributing $355 million in credits, resulting in a return quickly if a better offer is available that would make
on investment of 2.23 for the credits. When considering the project easier to nance or allow for a better
only the tax revenues received by New York State, the return. As a result, states have had to remain highly
return on investment is 1.09, so for every dollar of tax competitive with their incentive programs to attract
credit issued the report nds that $1.09 is generated and retain the lm industry.
as tax revenue.
Growth of the lm industry has additional economic
Note that the methodology of the HR&A Report differs benets outside of the sub-sectors directly related
from the Camoin Associates methodology in two primary to movie and television production. Reports have
ways, both of which have an impact when comparing shown that lm-induced tourism is real and can
the ndings of the two reports. First, the HR&A Report have positive implications on the overall economy.
is looking at a one year time frame whereas this report Additionally, when productions move in they impact
is focused on a two year time frame. Secondly, the many other industries such as lodging, retail,
HR&A Report includes all of the spending of projects construction, services, and others as the operation
that received the tax credit, plus a percent of all other hires locally.
spending in the lm industry in New York State. In
comparison, this analysis only includes the spending Reports that look at the economic impact of the
by productions that received the tax credit and can be lm industry in a particular geography consider
reasonably assumed to have been induced to New York all eligible spending as a result of access to the
State as a result of access to the credit program. The incentive program.
approach of this analysis is more conservative and is Incentive programs, of all types and for all industries,
focused on measuring only the activity that occurred as are controversial. The lm industry tax credit
a direct result of the tax credit program. program is no different and oversight and periodic
reviews are necessary to ensure the programs are
Finally, in 2015 a report was released by Empire State
furthering the intended goals.
Development that was prepared by Camoin Associates
measuring the impact of the Film Tax Credit Program In summary, lm-related incentive programs are widely
during 2013 and 2014. The 2013/2014 analysis available and are a key consideration in lm production
followed the same methodology being employed as nancing. In this highly mobile industry, incentives
this 2015/2016 report. appear to have a real effect on location decision-making.

Other Reports

Data Analysis
In addition to the reports that have been written
about the lm industry in New York State, the research
team also reviewed reports on other states, countries,
and topics associated with the analysis. The full list As shown in Figure 1, New York State began to lose lm
of references can be found in Attachment B with industry11 employment and earnings share beginning
summaries in Attachment C. around 2001. In that year, 21% of lm industry jobs were

10
Note that these studies were not done in connection with Empire State Development. In and Other Postproduction Services, and 512199 Other Motion Picture and Video Industries.
fact, the requirement for the analysis to be completed on a biennial basis was not added to It is important to note, however, that many lm jobs are not classied in these specic
the legislation until the most recent amendments that extended the program. NAICS codes. For example, many in the lm industry are counted in the Independent Artists
11
The lm industry is dened as the following NAICS codes: 512110 Motion Picture and sector or Entertainment Payroll sector and those are not counted here so the impact listed
Video Production, 512120 Motion Picture and Video Distribution, 512191 Teleproduction is most likely a conservative estimate.

6 Economic & Fiscal Impact Analysis of New York State Film Tax Credit Programs | January 2017
in the state. As other states started to introduce incentive
programs,New York began to lose employment share, 2010: Post-Production
Credit introduced
falling 6 percentage points to under 15% in just three
years. This comports with what our interviewees reported
to us that during this period projects were moving
2012: Post-Production
elsewhere and overall activity in the industry was sparse. Credit increased

In 2004, the state introduced its 10% lm credit

2004: Film Tax 2008: Program extended,
program, which had the effect of creating new jobs Credit introduced credit increased to 30%
and investment in New York. The credit was enhanced
to 30% in 2008, which further strengthened New Yorks
position in the industry. In the following years, the
states share of lm jobs and earnings continued to Figure 1: New York State Share of U.S. Film Industry Earnings
and Jobs, 20012005.
rise, again reaching its 2001 peak of 21% in 2013. Since
2013, New Yorks share of jobs has begun to decline
slightly, falling to 19% in 2015. Earnings have generally
followed a similar trajectory as jobs.
Interview
Findings
A closer look at the data and a review of what is
occurring nationally with lm industry tax credit
programs provides explanation as to why NYS is
experiencing a decrease in market share. The data An essential piece of our research was to conduct
shows that Louisiana, Florida, Georgia and Puerto Rico interviews with representatives from various elds
have seen an increase in their share of the television within the lm industry including production companies,
and lm industry over the last few years. All of these lm studios, production crew union representatives,
states are in the south and offer a more moderate post-production and visual effects companies, the
climate to work throughout the winter compared to Motion Picture Association of America, Upstate Film
New York State, however hurricane season can pose Commissioners, and others.12 These interviews provided
challenges. Louisiana and Florida had both been the research team with anecdotal information about
seeing signicant activity in the industry until recently issues being faced in the lm industry, the role of the
when both states made major changes to their tax tax credit within the work that they do, and how they
credit programs that will likely lead to slower or no have seen the industry change over time in New York
including before the tax credit was offered, when other
growth. Georgia offers a different incentive that can
states began offering it, when the New York tax credit
be more attractive to the large blockbuster lms as
was rst established and then strengthened, and nally
it allows for above-the-line costs to be included in
when it was extended.
the credit calculation. Finally, Puerto Rico also offers a
generous tax credit, has experienced crew, offers the Some of the key ndings from the interviews include:
backdrop of the Caribbean, and has seen an increase
Prior to the implementation of the tax credit
in their industry over the last few years.
program in 2004, work in the lm industry was
sporadic and unsteady. Only a handful of television

12
These interviews were conducted in 2014 as part of the 2013/2014 tax credit incentive
analysis. The ndings have been reviewed to ensure they still apply.

Economic & Fiscal Impact Analysis of New York State Film Tax Credit Programs | January 2017 7
 shows and movies were shot in New York. Many cost of productions in Upstate (and other
productions were shot elsewhere, primarily Toronto, adjacent states) is a result of the need to provide
with one or two weeks worth of shooting in New transportation, overnight accommodations, per
York City to capture key shots of streets, landmarks, diem, and other benets to those working on the
and iconic buildings. In addition, prior to the tax productions because most of the production staff
credit program, commercials accounted for a larger are based in NYC. Some Upstate NY locations
share of the industrys work when now it accounts are better equipped to support the industry with
for only a small share of overall work and industry workforce and talent base necessary for smaller
spending in New York. independent productions.

Historically, during periods of time when the The interviewees indicated that the non-scripted
stability of the tax credit program was uncertain, productions (e.g. documentaries, reality shows, and
work in the lm industry would fall off as productions news programs which are not eligible for the NYS
moved elsewhere to locations with more stability tax credit) are not as mobile, have lower budgets,
surrounding the availability of incentives. and their location decisions are not as tied to the
availability of incentive programs.
While location decisions in the industry were
historically driven by creative factors, more recently The access of the standalone post-production
incentive has had a major impact on the post-
cost (and the availability of incentive programs to
production industry in NYS and has allowed it to
offset those costs) have been the number one factor
compete with other states.
considered. This has led to competition between
states and countries that offer incentives. Conversations with ESD ofcials highlighted the
many productions that are being shot outside of
Comparatively, NYS is an expensive place to do
New York City in places such as Rochester, the
business for the lm industry when considering
Adirondacks, the Capital Region, Long Island,
wages, taxes, and other costs. The tax credit brings
and beyond. The ofcials reported the spending
lms and television productions in NYS more in line
that occurs in the local economy as a result of
with other location options and levels the playing
these types of productions includes spending on
eld somewhat so that productions in NY make
local restaurants/catering, lodging, dumpsters,
nancial sense.
equipment rentals, local contractors, site rentals,
The aspects of the program that require use of police, local labor, and other. Some of the
qualied production facilities has helped to build productions that were highlighted include: Teenage
up the industrys infrastructure in a way that has Mutant Ninja Turtles (Tupper Lake, NY), Muhammad
not occurred in other states. This investment in Alis Greatest Fight (Capital Region), The Amazing
infrastructure has had a lasting impact on the New Spider-Man 2 (Rochester), The Place Beyond the
York State economy through increased property tax Pines (Schenectady), and others. These types of
productions have a major impact on the local
revenue and an overall improvement to the industry
economy and can really provide a boost to goods
as one project builds off the next.
and service providers. For example, The Amazing
The lm industry in Upstate NY is in competition Spider-Man 2 brought in over $2 million in new
with other neighboring states such as Massachusetts spending to the Rochester economy and Teenage
and Connecticut but not typically in competition Mutant Ninja Turtles brought in over $1 million
with New York City. The increased cost of doing to Tupper Lake. In Tupper Lake, one deli did the
work outside of New York City is a factor when catering daily for the three month shoot of Teenage
considering where to locate a lm. The increased Mutant Ninja Turtles and with the additional income

8 Economic & Fiscal Impact Analysis of New York State Film Tax Credit Programs | January 2017
 was able to upgrade their operation into a fully
functioning bar and restaurant. As productions Modeling Software
outside of NYC become more common the Economic Modeling Specialists, Intl. (EMSI) designed
the input-output model used in this analysis. The EMSI
workforce and infrastructure will continue to build
model allows the analyst to input the amount of new
and be even more attractive to productions looking direct economic activity (spending, earnings, or jobs)
for unique settings and landscapes. occurring within the study area and uses the direct
inputs to estimate the spillover effects that the net
new spending, earnings, or jobs have as these new
dollars circulate through the study areas economy. This
is captured in the indirect impacts and is commonly

ECONOMIC
referred to as the multiplier effect. See Attachment A
for more information on economic impact analysis.

IMPACT OF THE
Denition of a Job
A job is equal to one person employed for some

FILM INDUSTRY
amount of time (part-time, full-time, or temporary)
during 2015 or 2016. For example, if a person is
employed full-time in 2015 and 2016 that would be
considered two jobs. Another example is if one person
is employed part-time for four months, then takes two
Availability of the New York State lm
months off and is hired again for four months that would
industry tax credit programs be counted as two jobs.
(both the production and
The information must be calculated in this way as a
post-production credit) has result of the way the job information is reported by the
resulted in the industry spending Quarterly Census of Employment and Wages (QCEW),
Bureau of Labor Statistics (BLS), and Bureau of Economic
signicant amounts of money throughout the
Analysis (BEA). The information is provided by the
state. Expenditures on labor, equipment, construction, employers to the government in terms of total jobs, not
lodging, food, transportation, and many other expenses by total number of total full-time equivalents (FTE).

are the Direct Impact of the lm industry tax credit

program. Indirect Impacts occur as the businesses was included in the analysis if its photography start date
supplying directly to the lm industry make purchases was in 2015 or 2016. A post-production credit-eligible
from second-tier suppliers, those second-tier suppliers project was included if its post-production start date
make purchases from third-tier suppliers, and so on, was in either of these years.
back through the supply chain. Another component of
indirect impacts are induced impactsthose impacts There are three stages of the application process:
that occur as employees, both those in the lm industry submission of the initial application, submission of
and those working for lm industry suppliersspend the nal application, and audit of the nal application.
their wages in the economy. Together, direct, indirect, Because many of the projects included in the analysis
and induced impacts comprise the total economic have not yet completed production, complete nal
impact of the lm industry on New York State. audited spending data was not yet available. As a
result, Camoin Associates relied on the most current
Methodology data available for each project. For projects in the rst
Empire State Development provided Camoin Associates stage, we used project spending estimates provided
with production and post-production spending gures by the applicant, and for projects in the second phase
for credit-eligible projects scheduled to be produced we used actual unaudited data on project spending
during 2015 and 2016. These were projects for which provided by the applicant. Actual audited data on
tax credit applications had been submitted as of project spending was used for projects in the third
December 2016. A production credit-eligible project phase of the application process.

Economic & Fiscal Impact Analysis of New York State Film Tax Credit Programs | January 2017 9
 Production and post-production spending by credit- Production Tax Credit
eligible projects falls into two categories: qualied and
Table 5 shows aggregate spending in New York State
non-qualied costs. Qualied costs refer to production
in 2015 and 2016 associated with the production
costs to which the tax credit can be applied and include
credit, as reported in tax credit applications. In total,
most below-the-line expenditures, such as costs for
credit-eligible projects accounted for over $6.3
technical and crew production, use of lm production
billion in in-state spending. The vast majority of that
facilities, props, makeup, wardrobe, non-speaking
amount91%occurred in New York City.
background extras, lm processing, camera, sound
recording, set construction, lighting, shooting, editing,
and meals. Non-qualied costs include above-the-line Table 5: Spending in NYS Associated with
Production Credit (2015 & 2016)
expenditures, such as story and script costs and wages
for writers, directors, producers, actors, and performers. NYC Productions $5,741,736,536
While only qualied costs are eligible for the lm tax NYS Outside NYC Productions $575,623,130
credit, non-qualied costs incurred in New York State Total $6,317,359,666
were also included in the analysis because the State would
Source: Empire State Development
not have beneted from this non-qualied spending
without the tax credit being in place. In other words, the
Economic Impact of the Production
economic benets derived from non-qualied spending
are entirely contingent on the qualied spending Credit on New York State
incentivized by the tax credit program. Therefore, any The $6.3 billion in direct spending was inputted into the
production and post-production spending occurring in input-output model to generate the total impacts on
New York State, whether qualied or non-qualied, was the state in terms of jobs, earnings, and spending. Over
included in the analysis. the two-year period covering 2015 and 2016, Camoin
Associates estimates the following impacts associated
The following sections detail the economic impacts of
with the production tax credit (Table 6):
the production and post-production tax credits on New
York State as a whole, and by region. For the production Approximately 68,400 jobs in New York State,
credit, there are additional benets granted to projects of which about 33,000 were directly related to
for spending that occurs outside of New York City. We production activities and 35,000 were a result of
show separate economic impacts for New York City indirect economic activity.
and the rest of New York State. For the post-production
credit, the geographic distinctions are different. The Approximately $4.1 billion in earnings by New York
state is divided into Downstate and Upstate regions, State workers, of which $1.9 billion was directly
with Downstate corresponding to the Metropolitan attributable to production activities and $2.1 billion
Commuter Transportation District (MCTD)13, and Upstate was a result of indirect activity.14
consisting of the remaining New York State counties. Approximately $12.2 billion in spending in the New
York State economy, of which about $6.3 billion
was direct spending by credit-eligible projects and
about $5.8 billion was indirect spending.15

13
Downstate is dened as the Metropolitan Commuter Transportation District (MCTD), in which there are many temporary jobs. While the model estimates average earnings per
which consists of the ve boroughs of NYC, as well as Dutchess, Nassau, Orange, Putnam, worker of $58,500, note that this includes the full range of employment from workers who
Rockland, Suffolk, and Westchester counties. Upstate consists of the remaining counties may have worked only a portion of the year to those holding full-time jobs.
in New York State. 15
Note that the earnings impact is also captured in the spending impact. As the production
14
Note that the EMSI model provides the total number of jobs, whether they are part-time, companies spend money on labor they are creating additional earnings.
full-time or temporary. This is particularly important to note as it relates to the lm industry

10 Economic & Fiscal Impact Analysis of New York State Film Tax Credit Programs | January 2017
 Table 6: Production Credit - Impact on New York State (2015 & 2016)

Direct Indirect Total

Jobs 33,028 35,340 68,368
Earnings $1,932,227,332 $2,144,772,338 $4,076,999,670
Spending $6,317,359,666 $5,834,452,283 $12,151,811,949
Source: Empire State Development, EMSI, Camoin Associates

Table 7: Production Credit - Impact of NYC Productions on NYC (2015 & 2016)

Direct Indirect Total

Jobs 26,285 22,342 48,627
Earnings $1,750,094,438 $1,575,084,995 $3,325,179,433
Spending $5,741,736,536 $4,267,468,019 $10,009,204,555
Source: Empire State Development, EMSI, Camoin Associates

Economic Impact of the Production Economic Impact of the Production

Credit on New York City Credit on New York State outside
A separate model was run to estimate the impact on of New York City
New York City of NYC productions receiving production A third model was run to estimate the impact of
credits. Over the two-year period covering 2015 and productions outside of New York City receiving the
2016, Camoin Associates estimates the following production credit on the rest of New York State outside
impacts on New York City associated with the production of New York City. Over the two-year period covering
tax credit (Table 7): 2015 and 2016, Camoin Associates estimates the
following impacts associated with the production tax
Approximately 48,600 jobs in New York City,
credit (Table 8):
of which about 26,300 were directly related to
production activities and 22,300 were a result of Approximately 7,500 jobs in the rest of New York
indirect economic activity. State, of which about 4,900 were directly related
to production activities and 2,600 were a result of
Approximately $3.33 billion in earnings by New
indirect economic activity.
York City workers, of which $1.75 billion was directly
attributable to production activities and $1.58 Approximately $298 million in earnings, of which $176
billion was a result of indirect activity. million was directly attributable to production activities
and $122 million was a result of indirect activity.
Approximately $10.0 billion in spending in the New
York City economy, of which about $5.7 billion was Approximately $897 million in spending, of which
direct spending by credit-eligible projects and about $576 million was direct spending by credit-
about $4.3 billion was indirect spending. eligible projects and about $321 million was
indirect spending.

Economic & Fiscal Impact Analysis of New York State Film Tax Credit Programs | January 2017 11
 Table 8: Production Credit - Impact of Productions
Outside of NYC on NYS Outside of NYC (2015 & 2016)

Direct Indirect Total*

Jobs 4,905 2,599 7,504
Earnings $176,188,672 $121,570,183 $297,758,855
Spending $575,623,130 $321,103,916 $896,727,046
Source: Empire State Development, EMSI, Camoin Associates

Post-Production Tax Credit Table 9: Spending in NYS Associated with

Table 9 shows aggregate spending in New York State Post-Production Credit (2015 & 2016)
in 2015 and 2016 associated with the post-production
Downstate Activity $223,119,915
credit, as reported in tax credit applications. In total, credit-
eligible projects accounted for close to $226 million in Upstate Activity $2,752,558
in-state spending. The overwhelming majority of that Total $225,872,473
amountalmost 99%occurred in Downstate New York. Source: Empire State Development

Economic Impact of the Post-

Production Credit on New York State
The $226 million in direct spending was inputted in to
the input-output model to generate the total impacts on
the state in terms of jobs, earnings, and spending. Over
the two-year period covering 2015 and 2016, Camoin
Associates estimates the following impacts associated
with the post-production tax credit (Table 10):

Approximately 2,400 jobs in New York State,

of which about 1,200 were directly related to
production activities and 1,300 were a result of
indirect economic activity.

Approximately $146 million in earnings by New

York State workers, of which $69 million was directly
attributable to production activities and $77 million
was a result of indirect activity.

Approximately $434 million in spending in the New

Photo provided by Empire State Development
York State economy, of which about $226 million
New York Governor Andrew M. Cuomo announces the
was direct spending by credit-eligible projects and completion of Silvercup North, a new lm and television
about $209 million was indirect spending. production facility in the South Bronx.

*Note that the impacts estimated by the individual models for New York City and the rest of only measuring the impact of NYC productions on NYC and therefore it does not account
New York State do not sum to the total impacts estimated by the New York State model. This for the impact of NYC productions on other NYS locations, and vice versa. The economic
is because the individual models are not able to take into account the economic exchanges exchanges between the two sub-regions accounts for the difference of 12,237 jobs in New
between the two sub-regions. In other words, the model assessing the impact on NYC is York State and associated earnings and spending.

12 Economic & Fiscal Impact Analysis of New York State Film Tax Credit Programs | January 2017
 Table 10: Post-Production Credit - Impact on New York State (2015 & 2016)

Direct Indirect Total

Jobs 1,181 1,263 2,444
Earnings $69,085,344 $76,684,731 $145,770,075
Spending $225,872,473 $208,606,477 $434,478,950
Source: Empire State Development, EMSI, Camoin Associates

Table 11: Post-Production Credit - Impact of Downstate NY Activity on Downstate NY (2015 & 2016)

Direct Indirect Total

Jobs 1,071 1,125 2,196
Earnings $68,257,876 $74,401,084 $142,658,960
Spending $223,119,915 $201,445,340 $424,565,255
Source: Empire State Development, EMSI, Camoin Associates

Economic Impact of the Post- Economic Impact of the Post-

Production Credit on Downstate Production Credit on Upstate
A second model was run to estimate the impact of A nal model was run to estimate the impact of the post-
the post-production credit on Downstate New York. production credit on Upstate New York. Over the two-
Over the two-year period covering 2015 and 2016, year period covering 2015 and 2016, Camoin Associates
Camoin Associates estimates the following impacts estimates the following impacts on Upstate associated
on Downstate associated with the post-production tax with the post-production tax credit (Table 12):
credit (Table 11):
Approximately 50 jobs in Upstate New York, of which
Approximately 2,200 jobs in Downstate, of which about about 35 were directly related to production activities
1,100 were directly related to production activities and and 14 were a result of indirect economic activity.
1,100 were a result of indirect economic activity.
Approximately $1.4 million in earnings, of which
Approximately $143 million in earnings by Downstate $840,000 was directly attributable to production
workers, of which $68 million was directly attributable activities and $563,000 was a result of indirect activity.
to production activities and $74 million was a result
of indirect activity. Approximately $4.2 million in spending, of which
about $2.8 million was direct spending by credit-
Approximately $425 million in spending in the eligible projects and about $1.5 million was
Downstate economy, of which about $223 million was indirect spending.
direct spending by credit-eligible projects and about
$201 million was indirect spending.

Economic & Fiscal Impact Analysis of New York State Film Tax Credit Programs | January 2017 13
 Table 12: Post-Production Credit - Impact of Upstate NY Activity on Upstate NY (2015 & 2016)

Direct Indirect Total*

Jobs 35 14 49
Earnings $840,054 $562,836 $1,402,890
Spending $2,752,558 $1,491,292 $4,243,850
Source: Empire State Development, EMSI, Camoin Associates

Table 13: Production & Post-Production Credit -

Total Economic Impact on New York State (2015 & 2016)

Direct Indirect Total

Jobs 34,209 36,603 70,812
Earnings $2,001,312,675 $2,221,457,070 $4,222,769,745
Spending $6,543,232,139 $6,043,058,760 $12,586,290,898
Source: Empire State Development, EMSI, Camoin Associates

Total Economic Impact of the Film Tax Additional Economic Activity

Credit Program on New York State The New York State lm industry tax credit programs
The table above shows the combined impact of both the have an impact beyond just what is calculated in the
production and post-production tax credits on all of New above sections. These additional impacts include: (a)
York State. Over the two-year period covering 2015 and support of lm industry cluster-specic workforce and
2016, Camoin Associates estimates the following impacts infrastructure development, and (b) lm production-
on the State associated with the credits (Table 13): induced tourism. These impacts are not accounted
for in the above economic impact calculations, but
Approximately 70,800 jobs in New York State, nevertheless have an impact on the lm industry and
of which about 34,200 were directly related to the NYS economy.
production activities and 36,600 were a result of
indirect economic activity. Film Industry Workforce and Film Production
Infrastructure Development
Approximately $4.2 billion in earnings, of which
The lm industry is clearly an important industry cluster for
$2.0 billion was directly attributable to production
NYS. As with all clusters, there is a virtuous self-reinforcing
activities and $2.2 billion was a result of indirect
cycle where groupings of like-minded businesses, workers
activity.
and infrastructure serve to perpetuate the advantages of
Approximately $12.6 billion in spending, of doing business in that location.
which about $6.5 billion was direct spending by
For example, as more productions occur in NYS, there
credit-eligible projects and about $6.0 billion was
are more employment opportunities, the skill levels of
indirect spending.
the overall workforce is improved, and the industry as
a whole benets. As new productions come up, they

*Note that the impacts estimated by the individual models for New York City and the rest of is because the individual models are not able to take into account the economic exchanges
New York State do not sum to the total impacts estimated by the New York State model. This between the two sub-regions.

14 Economic & Fiscal Impact Analysis of New York State Film Tax Credit Programs | January 2017
have access to the high-quality workforce that has been Producers and Directors comprise the largest share
built through the years. of lm industry jobs, accounting for about 20%
of jobs, followed by Actors with 10% of jobs, and
Since the credit program was introduced, employment
Film and Video Editors with 9%. All 10 occupations
in the lm industry in NYS is up by 49%, from 32,533
jobs in 2004 to 48,581 jobs in 2015, according to data experienced at least 30% job growth over this period.
from the Bureau of Labor Statistics. This is compared In general, NYS lm industry jobs are relatively high-
to a 9% increase in jobs in the states economy overall. paying, with over 70% of industry jobs in occupations
Table 14 highlights the top 10 occupations in the with a median hourly wage higher than the economy-
industry and how much they have grown since 2004. wide median ($24.34).

Photo provided by Empire State Development

Teenage Mutant Ninja Turtles: Out of the Shadows shooting in Buffalo in Spring 2015.

Economic & Fiscal Impact Analysis of New York State Film Tax Credit Programs | January 2017 15
 Table 14: Top 10 Occupations in the Film Industry

% of Total
Employed Employed %
Change Jobs Median Typical Entry
in Film in Film Change
SOC Description (2004 in Film Hourly
Industry Industry (2004 Level Education
2016) Industry Earnings
(2014) (2016) 2016)
(2016)
Producers and
27-2012 6,854 12,014 5,160 75% 20% $41.11 Bachelors Degree
Directors
Some college,
27-2011 Actors 3,702 6,028 2,326 63% 10% $30.56
no degree
Film and Video
27-4032 3,107 5,307 2,200 71% 9% $30.69 Bachelors Degree
Editors
Audio and Video
Post-secondary
27-4011 Equipment 1,393 2,163 770 55% 4% $23.77
non-degree award
Technicians
High School
Ofce Clerks,
43-9061 1,469 2,105 636 43% 4% $14.76 Diploma or
General
equivalent
Camera Operations,
27-4031 Television, Video, 1,291 1,699 408 32% 3% $25.40 Bachelors Degree
and Motion Picture

Laborers and
No formal
Freight, Stock, and
53-7062 1,117 1,550 433 39% 3% $12.34 educational
Material Movers,
credential
Hand
Multimedia Artists
27-1014 1,141 1,495 354 31% 3% $21.98 Bachelors degree
and Animators

27-3041 Editors 912 1,335 423 46% 2% $31.93 Bachelors degree

Production, High School
43-5061 Planning, and 746 1,233 487 65% 2% $24.17 Diploma or
Expediting Clerks equivalent
Source: EMSI

Several workforce training programs have been lm industry, offering a training program that leads to
implemented in response to New Yorks burgeoning certication and job placement.
lm industry. For example, in collaboration with the
The requirement of the tax credit program that
New York City Department of Education and the Tribeca
Film Festival, the Ofce of Media and Entertainment productions must use qualied production facilities
has implemented a curriculum for elementary, middle, has created increased demand and limited vacancy at
and high school students to learn about media arts soundstages and the need for new infrastructure to be
in the classroom. In 2015 Brooklyn Colleges Barry R. built. An article by Addie Morefoot called Stage Might
Feirstein Graduate School of Cinema will begin offering reports on the challenges facing productions looking
a cinema graduate program located at Steiner Studios to nd good-quality stage space in the NYC metro
at the Brooklyn Navy Yard. Also at Steiner Studios will area that provides the desired amenities. As the lm
be a technology-focused media and design program industry has grown in the area the demand for space has
offered by Carnegie Mellon University. Working with increased and producers have found it more and more
the City of New York, non-prot Brooklyn Workforce difcult to nd adequate space in the last few years. The
Innovations developed the Made in NY program growth of the production industry (specically television
which recruits unemployed New Yorkers for jobs in the production) has created a situation where soundstages

16 Economic & Fiscal Impact Analysis of New York State Film Tax Credit Programs | January 2017
are in high demand and property Grumman Studios is undergoing a major renovation
owners are investing millions of dollars of their stages in Bethpage, NY.19
in new and renovated stages. The
York Stages announced plans to invest $44 million
article says Established studios are
in a 300,000 square foot facility in the Bronx.21
furiously expanding throughout the
ve boroughs, while newcomers are The Molecule, a creative studio specializing in visual
converting industrial spaces in the city and in northern effects, motion graphics, virtual reality, production,
suburbs into stages. Even entrepreneurs farther upstate and interactive installations, expanded their staff
are angling for a piece of the action. The article goes on by 20 full-time staff and 30 additional freelancers
to say the uncertainty of the future of the lm tax credit in 2015. In addition to adding staff they relocated
has made developers uneasy and the loss of this credit their headquarters in order to have more space and
would result in ninety percent of the facilities closing. be able to accommodate up to 120 employees.22, 23
Some of the new investments to quickly respond to the
demand are conversions of old warehousing spaces, Vice Media, a youth media company and content
however these facilities do not have the amenities of the creation studio, has grown from 400 employees in
more established soundstages like Broadway Stages, 2014 to over 700 employees in 2016 and is on track
Steiner Studios, Kaufman Astoria, and Silvercup Studios to reaching 925 employees by 2019.24
which have ofces, dressing rooms, and other support
Phosphene, a visual effects and design company,
services that are professionally run and managed.
moved to Lower Manhattan and has tripled in
Some of the expansions and developments that have size. In addition to growing their staff they are also
occurred recently to accommodate the growing lm participating in the Post NY Alliances Post Production
production industry include: Fellows Program by bringing on interns.25

Silvercup Studios opened a $35 million, three- The Harbor Picture Company opened Harbor Grand
soundstage facility in the South Bronx to be known in September 2015 to be the largest theatric mix
as Silvercup North.16 stage in New York City. This new facility will create
or retain 65 jobs in New York that otherwise were
Kaufman Astoria Studios announced that it would
considering relocating to Georgia or California.26
be building two new soundstages to bring their
total number of stages up to 12.17 These are just a selection of the investments that have
been made in the hard infrastructure of the lm industry
Broadway Stages operates over 20 stages in
in NYS. While the development of this infrastructure is
Brooklyn and Queens and they plan to invest $20
a great benet to productions looking to locate in New
million to renovate the Arthur Kill Correctional
York State, information learned from interviews suggests
Facility on Staten Island.18
that simply having the infrastructure is not enough to
Steiner Studios is adding six stages to their Brooklyn counteract the nancial incentive of tax credit programs
Navy Yard lot and they intend to add another 10 to elsewhere and that the infrastructure must be combined
reach 40 total stages at their facility.19 with the NYS tax incentive program.

16
Morefoot, 2016 22
Governors Ofce of Motion Picture & Television Development, 2016
17
Morefoot, 2016 23
Governors Ofce of Motion Picture & Television Development, 2016
18
Morefoot, 2016 24
Governors Ofce of Motion Picture & Television Development, 2016
19
Morefoot, 2016 25
Governors Ofce of Motion Picture & Television Development, 2016
20
Governors Ofce of Motion Picture & Television Production, 2015 26
Governors Ofce of Motion Picture & Television Development, 2015
21
Governors Ofce of Motion Picture & Television Development, 2015

Economic & Fiscal Impact Analysis of New York State Film Tax Credit Programs | January 2017 17
 Table 15: Economic Impact on NYS of Losing 10% of Ineligible Production Activity

Direct Indirect Total

Jobs 8,690 21,254 29,944
Earnings $960,167,366 $1,296,225,945 $2,256,393,311
Spending $4,327,300,293 $3,624,943,758 $7,952,244,051
Source: Empire State Development, EMSI, Camoin Associates

However, there are a host of non-eligible lm

productions27 that currently occur in NYS that are Table 16: Fiscal Impact of Losing
10% of Ineligible Production Activity
largely a result of the virtuous cycle of the lm industrys
economic cluster in the state. In fact, these non-eligible New York State Tax Collections $431,786,246
productions account for a majority of the employment
New York City Tax Collections $577,434,893
in the lm industry cluster in NYS. Therefore, eligible
productions that occur in the state due to the tax Total $1,009,221,139
credit program are serving to maintain the viability of Source: Camoin Associates
the economic cluster. Said another way, should NYS
abandon its incentive programs and thus precipitate a Film Production Induced Tourism
departure of a portion of the cluster, the entire cluster
Both quantitative and qualitative research suggests that
is weakened, including the non-eligible jobs.
the lm industry has a positive impact on tourism, as
Quantifying this effect is extremely problematic and, people want to visit the places they have seen in lm
at best, imprecise. Of the 51,908 New York State lm and television. Film-induced tourism can take a number
industry jobs in 2016, approximately 8,50028 (about of different forms ranging from tourists extending their
16%) are directly attributable to the tax credit program, stay at a destination to visit different sites featured in a
while the remaining 84% are therefore associated with movie or television show, to distinct visits to a location
non-eligible productions. To best understand the effect or country to see where the lm was made, to visitors
of losing non-eligible production activity on an order- traveling to see where a lm or television show is
of-magnitude basis, we will simply note that if NYS had currently being made. All of this visitation generates
shed even 10% of the cluster jobs associated with non- revenue and employment that otherwise would not exist
eligible production over the 20152016 period, it would without the connection to the lm industry.
have lost a total of 29,944 jobs, nearly $2.3 billion in
A study conducted on tourism in Australia, New Zealand,
earnings, and nearly $8 billion in spending (Table 15).29
and Kazakhstan after releases of movies that are either
Lost tax collections by New York State and New York set or lmed in those locations (Mad Max, The Lord of
City as a result of losing 10% of credit non-eligible the Rings, and Borat, respectively) found that there was
production activity would total $1 billion (Table 16).30 evidence of an increase in tourism for a period following
the release of a successful movie.31 Additional research
conrms the nding that television and movies can have
a strong inuence on the tourism industry.32

27
As noted above, non-eligible productions exclude non-scripted lm production such as jobs associated with credit non-eligible activity, 10% is the hypothetical amount of lost
documentaries and news broadcasts. non-eligible activity, and 2 is the number of years in the 20152016 period. The source
28
A review of the industries that make up the direct jobs generated as a result of the tax for 2016 job gures is EMSI.
credit program nd that 8,500 are in the NAICS codes associated with the television and 30
Calculated using the proportion of Gross State Product (or Gross Regional Product) method
lm industry as listed in footnote 10. as detailed in Fiscal Impact of the Film Industry section below. In calculating tax collections
8,690 jobs was used as an input into the model. 8,690 = 51,908 * 84% * 10% * 2,
29 for New York City, we assumed that 93.4% of lost activity would be attributable to New
where 51,908 is the total number of NYS lm industry jobs, 84% is the share of those York City, as New York City accounts for that amount of total industry sales.

18 Economic & Fiscal Impact Analysis of New York State Film Tax Credit Programs | January 2017
Examples of lm induced tourism include:
Table 17: Estimate of the Impact of Tax Credit
Field of Dreams The movie Field of Dreams Programs on Film Induced Tourism in NYC
starring Kevin Costner and James Earl Jones was
Total Tourism Related Jobs in NYC 395,020
rst released in 1989 and portrays a story about a
baseball eld in rural Iowa. Since the movie was Film Induced Tourism Job (1% of total) 3,950
released, the site where Universal Studios built the Percent of Film Industry Resulting from
Tax Credit Programs
16%
baseball eld has remained relatively untouched
and attracted hundreds of thousands of tourists. Film Induced Tourism Jobs Resulting
from Tax Credit Programs
644
Some changes are being proposed for the site by
the new owners that would maintain the original Source: Empire State Development, Camoin Associates

eld but would add additional elds to host when tourists are able to visit the locations of
tournaments and other events and bring in even scenes they are familiar with from television and
more people.33, 34 movies. Tour companies are capitalizing on visitors
interest in these sites by organizing and promoting
Twilight Trilogy Before the Twilight trilogy, Forks,
various tours to locations made familiar by shows
Washingtons claim to fame was that it was the
such as Sex and the City, Friends, Seinfeld, and
rainiest town in the United States. Now the Forks
others. Additionally, live shows that lm in New York
Chamber of Commerce is capitalizing on the intense
City are also an attraction as people come to see
fan base and success of the lm by promoting the
Saturday Night Live, The Tonight Show, The Today
towns role in the lm and hosting tours and other
Show, and many others lmed live.
special events like Stephenie Meyer Day/Bellas
Birthday weekend, marketed as an annual event It is clear that the robust lm industry in NY supports
with attractions, entertainment, and vendors geared the tourism industry in NYC; however, estimating the
towards celebrating Twilight.35 degree to which lm is the driving factor for visitation
is outside the scope of this analysis. In an attempt to
The Millennium Effect The Millennium series, of
better understand how the loss of the lm industry
which The Girl with the Dragon Tattoo is the rst
would impact the tourism industry we can conduct an
lm of three, has had a signicant impact on
order-of-magnitude assessment to provide an estimate
Sweden once the book was turned into a mega-
for how the tax credit programs impact tourism industry
hit blockbuster movie. The majority of the lm was
employment. According to Empire State Development,
shot in the capital city regions and exposed over
there are over 395,020 jobs in New York City that are
20 million people worldwide to the landscapes
associated with the tourism industry. If we assume that
and architecture of Stockholm and Sweden. The
lm-induced tourism accounts for 1%37 of total tourism
success of this movie has impacted tourism with
in New York City, this would support 3,950 tourism jobs.
more than 10,000 tourists a year taking the guided
If 15% of the jobs in the lm industry are attributable to
tour and another 6,000 copies of the Millennium
the tax credit programs (as calculated above), then we
map being sold.36
can assume that 15% of the 3,950 tourism jobs are also
New York State Film Industry Tourism New attributable to the tax credit programs. Based on this
York City is home to both one of the largest lm order-of-magnitude estimate, the tax credit programs
industries and tourism industries in the world and account for approximately 545 jobs in the tourism
these two industries complement each other well industry in NYC (Table 17).

31
Mitchell & Stewart, 2012 35
Twilight, 2014
32
http://www.bu.ac.th/knowledgecenter/epaper/jan_june2009/pdf/Walaiporn.pdf 36
Cloudberry Communications , 2011
33
Belson, 2011 37
This is just an estimate to provide an order-of-magnitude analysis. No surveys or other
34
Doster, 2014 research has been done to qualify this percentage.

Economic & Fiscal Impact Analysis of New York State Film Tax Credit Programs | January 2017 19
 FISCAL IMPACT
in 2015 for each tax category to determine the
portion of tax collections attributable to the lm tax

OF THE FILM
credit program.38 This methodology is based on the
assumption that the share of credit-related lm industry

INDUSTRY
spending relative to the NYS Gross State Product is
approximately equal to the share of NYS tax collections
attributable to the tax credit program. In other words,
the lm industry activity makes up a certain percentage
Beyond the economic impacts previously calculated,
of the states total economic activity and therefore the
there are also scal impacts of the lm industry that
lm industry accounts for a similar percentage of the
result from increased economic activity and accrue
states revenue. Table 18 details this calculation.
in the form of additional tax revenue. To estimate
tax collections, Camoin Associates calculated the Camoin Associates estimates total tax collections by
proportion of lm production spending associated with New York State in 2015 and 2016 resulting from the
credit-eligible products relative to New York States Production Tax Credit to be about $660 million, and tax
Gross State Product in 2015. This percentage was collections resulting from the Post-Production Credit to
then applied to New York States total tax collections be about $24 million (Table 19).

Table 18: Project Spending as a Percent of Gross State Product (GSP)

NYS 2015 Gross State Product (GSP) $1,441,003,000,000
Project Spending Percent of GSP
Production Credit $12,151,811,949 0.84%
Post-Production Credit $434,478,950 0.03%
Source: Bureau of Economic Analysis, Empire State Development, Camoin Associates

Table 19: Fiscal Impact on New York State

A B C
Tax Collections
Tax Collections Attributable
Attributable to Post-
2015 NYS Tax Collections to Production Credit
Production Credit
(Col. A x 0.84%)
(Col. A x 0.03%)
Individual Income Tax $43,713,484,000 $368,630,764 $13,180,117
Corporate Income Tax $5,084,187,000 $42,874,362 $1,532,941
General Sales Tax $13,104,421,000 $110,508,070 $3,951,133
Selective Sales Tax $10,865,420,000 $91,626,833 $3,276,049
License Taxes $1,764,149,000 $14,876,865 $531,911
Other Taxes $3,711,068,000 $31,295,008 $1,118,930
Total $78,242,729,000 $659,811,901 $23,591,081
Source: 2015 Annual Survey of State Government Tax Collections, Camoin Associates

New York State total tax collections obtained from

38

2015 Annual Survey of State Government Tax Collections.

20 Economic & Fiscal Impact Analysis of New York State Film Tax Credit Programs | January 2017
 Table 21: Estimated Credit Payouts for 2015 and 2016 Projects
2016 2017 2018 2019 2020 NPV of Payout
Production Credit $164,539,672 $378,567,192 $415,664,256 $275,435,103 $100,317,318 $1,298,902,333
Post-Production Credit $7,785,121 $29,806,059 $17,640,614 $1,328,122 $725,414 $56,227,345
Source: Empire State Development

Table 20: Tax Credits Issued Table 22: Production Credit -

Return on Investment
Production Credits $1,388,161,657
Post-Production Credits $59,753,414
New York State Tax Collections $659,811,901
NPV of Estimated Production
Total $1,447,915,071 $1,298,902,333
Credit Payout
Source: Empire State Development
Return on Investment Ratio 0.51
To determine the Return on Investment of the tax credit Source: Empire State Development, Camoin Associates
program, Camoin Associates compared total New York
State tax collections in 2015 and 2016 attributable to the Table 23: Post-Production Credit -
credit programs to the total credit amount projected Return on Investment
to be issued for projects initiated during this period. New York State Tax Collections $23,591,081
New York State will issue an estimated $1.45 billion in
NPV of Estimated Production
production and post-production tax credits to projects Credit Payout
$56,227,345
initiated in 2015 and 2016 (Table 20).
Return on Investment Ratio 0.42
Tax credits are paid out according to the following Source: Empire State Development, Camoin Associates
schedule: for distributions of less than $1 million, the
credit is typically paid out in the year following project To arrive at the amount of taxes collected by New York
completion. For distributions valued between $1 and City as a result of the lm credit program, Camoin
$5 million, the Credit is paid out in equal sums over the Associates used the same methodology that was used
two years following project completion. For distributions for NYS.40 As detailed in Table 24 and Table 25, an
estimated $755 million in taxes were collected that can
of over $5 million dollars, the credit is paid out in equal
be attributed to the program. Note that we imputed NYC
sums over the three years following project completion.
post-production spending under the assumption that the
Applying a discount rate of 1.5%39 to the payout schedule
NYC share of NYS post-production spending was similar
results in a net present value (NPV) of $1,298,902,333
to its share of production spending (about 91%).41
for the production credit and $56,227,345 for the post-
production credit (Table 21). Camoin Associates also estimated tax collections by
local taxing jurisdictions in New York State other than
As shown in Tables 22 and 23, Camoin Associates
New York City. This includes counties, cities, towns,
estimates the return on investment (ROI) ratio of the
special districts, and school districts outside of NYC.
Production Credit for the State of New York to be 0.49.
Over $113 million in tax revenues can be attributed to
In other words, for every $1 of tax credits paid out on
these jurisdictions (Table 26 and Table 27).42
an NPV basis, the State receives $0.51 in return in the
form of tax collections. The States ROI for the Post- When combining the tax benets accrued to NYS and
Production tax credit is $0.42 for every dollar of incentive. local jurisdictions, the ROI ratio for the production

39
Corresponds to the 5-year treasury yield. production spending is divided into Upstate and Downstate spending.
40
New York City GRP was obtained from EMSI, and total New York City 42
2015 total tax collections by local governments was estimated by adjusting the 2013
tax collections were obtained from the New York Independent Budget Ofce. value from the US Census of Governments to reect the change in NYS tax collections
41
Post-production spending gures are not directly available for New York City, as post- between 2013 and 2015.

Economic & Fiscal Impact Analysis of New York State Film Tax Credit Programs | January 2017 21
 Table 24: Project Spending as a Percent of NYC Gross Regional Product (GRP)
NYC 2015 Gross Regional Product (GRP) $738,446,000,000
Project Spending Percent of GRP
Production Credit $10,009,204,555 1.36%
Post-Production Credit $394,890,238 0.05%
Source: EMSI, Empire State Development, Camoin Associates

Table 25: Fiscal Impact on New York City

A B C
Tax Collections
Tax Collections Attributable
FY 1516 NYS Tax Attributable to Post-
to Production Credit
Collections Production Credit
(Col. A x 1.36%)
(Col. A x 0.05%)
Real Estate Tax $23,180,583,000 $314,199,274 $12,396,013
Personal Income Tax $11,392,473,000 $154,418,323 $6,092,221
Sales and Use Tax $8,540,154,000 $115,756,803 $4,566,920
Income Taxes, Other $6,947,614,000 $94,170,853 $3,715,295
Other Taxes $3,559,825,000 $48,251,350 $1,903,646
Total $53,620,649,000 $726,796,603 $28,674,095
Source: New York Independent Budget Ofce, Camoin Associates

Table 26: Project Spending as a Percent of

Gross Regional Product (GRP) of NYS Outside of NYC
NYS (balance) 2015 Gross Regional Product (GRP) $702,557,000,000
Project Spending Percent of GRP
Production Credit $2,142,607,394 0.305%
Post-Production Credit $39,558,712 0.006%
Source: EMSI, Empire State Development, Camoin Associates

Table 27: Fiscal Impact on New York State Outside of New York City
A B C

2015 NYS Tax Tax Collections

Tax Collections Attributable
Collections by NYS Local Attributable to Post-
to Production Credit
Governments Production Credit
(except NYC) (Col. A x 0.305%)
(Col. A x 0.006%)
All Taxes $36,472,927,957 $111,232,491 $2,055,230
Source: US Census State and Local Government Finances, Camoin Associates

22 Economic & Fiscal Impact Analysis of New York State Film Tax Credit Programs | January 2017
credit is 1.15. In other words, for every $1 NYS pays
Table 28: Production Credit -
in incentives, NYC receives about $0.56, other local Return on Investment
governments receive $0.09, and NYS receives $0.51 in
tax revenue (Table 28). New York State Tax Collections $659,811,901

The ROI for the post-production credit is 0.97, meaning New York City Tax Collections $726,796,603
that for every $1 of tax credits issued, NYC receives All Other NYS Local Govt Tax
$0.51, other local jurisdictions receive $0.04, and NYS Collections
$111,232,491
receives $0.42 in tax revenue (Table 29).
Combined Tax Collection $1,497,840,995
NPV of Estimated Production
Credit Payout
$1,298,902,333

Return on Investment Ratio 1.15

Source: Camoin Associates

Table 29: Post-Production Credit -

Return on Investment

New York State Tax Collections $23,591,081

New York City Tax Collections $28,674,095

All Other NYS Local Govt Tax

Collections
$2,055,230

Combined Tax Collection $54,320,406

NPV of Estimated Production
Credit Payout
$56,227,345

Return on Investment Ratio 0.97

Source: Camoin Associates

Economic & Fiscal Impact Analysis of New York State Film Tax Credit Programs | January 2017 23
 ATTACHMENT A: purchases of local goods and
services will then stimulate
WHAT IS AN ECONOMIC other local economic activity;
IMPACT ANALYSIS? such effects are referred to as
the Induced Effects of the
The purpose of conducting an economic impact study is change in nal demand.
to ascertain the total cumulative changes in employment,
earnings, and output in a given economy due to some Therefore, the total economic
initial change in nal demand. To understand the impact resulting from the new widget manufacturer is
meaning of change in nal demand, consider the the initial $1 million of new money (i.e. Direct Effects)
installation of a new widget manufacturer in Anytown, owing in the US economy, plus the Indirect Effects and
USA. The widget manufacturer sells $1 million worth of the Induced Effects. The ratio between Direct Effects and
its widgets per year exclusively to consumers in Canada. Total Effects (the sum of Indirect and Induced Effects) is
Therefore, the annual change in nal demand in the called the multiplier and is often reported as dollar-
United States is $1 million because dollars are owing in of-impact per dollar-of-change. Therefore, a multiplier
from outside the United States and are therefore new of 2.4 means that for every dollar ($1) of change in nal
dollars in the economy. demand, an additional $1.40 of indirect and induced
economic activity occurs for a total of $2.40.
This change in nal demand translates into the rst
round of buying and selling that occurs in an economy. Key information for the reader to retain is that this type
For example, the widget manufacturer must buy its of analysis requires rigorous and careful consideration of
inputs of production (electricity, steel, etc.), must lease the geography selected (i.e. how the local economy
or purchase property and pay its workers. This rst round is dened) and the implications of the geography on
is commonly referred to as the Direct Effects of the the computation of the change in nal demand. If this
change in nal demand and is the basis of additional analysis wanted to consider the impact of the widget
rounds of buying and selling described below. manufacturer on the entire North American continent, it
would have to conclude that the change in nal demand
To continue this example, the widget manufacturers is zero and therefore the economic impact is zero. This
vendors (the supplier of electricity and the supplier is because the $1 million of widgets being purchased by
of steel) will enjoy additional output (i.e. sales) that Canadians is not causing total North American demand
will sustain their businesses and cause them to make to increase by $1 million. Presumably, those Canadian
additional purchases in the economy. The steel producer purchasers will have $1 million less to spend on other
will need more pig iron and the electric company will items and the effects of additional widget production
purchase additional power from generation entities. In will be canceled out by a commensurate reduction in
this second round, some of those additional purchases the purchases of other goods and services.
will be made in the US economy and some will leak
out. What remains will cause a third round (with Changes in nal demand, and therefore Direct Effects,
can occur in a number of circumstances. The above
leakage) and a fourth (and so on) in ever-diminishing
example is easiest to understand: the effect of a
rounds of spending. These sets of industry-to-industry
manufacturer producing locally but selling globally.
purchases are referred to as the Indirect Effects of the
If, however, 100% of domestic demand for a good is
change in nal demand.
being met by foreign suppliers (say, DVD players being
Finally, the widget manufacturer has employees who imported into the US from Korea and Japan), locating
will naturally spend their wages. As with the Indirect a manufacturer of DVD players in the US will cause a
Effects, the wages spent will either be for local goods change in nal demand because all of those dollars
and services or will leak out of the economy. The currently leaving the US economy will instead remain.

24 Economic & Fiscal Impact Analysis of New York State Film Tax Credit Programs | January 2017
A situation can be envisioned whereby a producer is post/132145625283/post-production-in-new-york-
serving both local and foreign demand, and an impact state-continues-to?utm_
analysis would have to be careful in calculating how source=+NYLOVESFILM++October+2015&utm_
many new dollars the producer would be causing to campaign=NYLOVESFILM+Feb+2016+Newsletter&utm_
occur domestically. medium=email

Governors Ofce of Motion Picture & Television

ATTACHMENT B: Development. (2015, July 24). Soundstages
REFERENCES Expand as Production Booms Across New York State.
Retrieved November 29, 2016, from NYS Loves Film:
Adkisson, R. (2013, June). Policy Convergence, State http://nysloveslm.tumblr.com/post/124925059573/
Film-Production Incentives and Employment: A Brief soundstages-expand-as-production-booms-across-new
Case Study. Journal of Economic Issues, 445-453.
Governors Ofce of Motion Picture & Television
Belson, K. (2011, October 30). New Dreams for Development. (2016, February 29). New York
Field. The New York Times. Retrieved from http:// State Positions Itself as the Capital of New and
www.nytimes.com/2011/10/30/sports/baseball/eld- Digital Media. Retrieved November 29, 2016, from
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sold.html?pagewanted=all&_r=1& post/140219791743/new-york-state-positions-itself-
as-the-capital-of?utm_source=+NYLOVESFILM+-
California Film Commission. (2013). Progress
+Feb+2016&utm_
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California Film Commission. (n.d.). California Film Spotlight: The Molecule Celebrates its 10th
& Television Tax Credit Summary: New Program Anniversary with New Hires, Continued Growth.
Summary - AB 1839. Retrieved November 29, 2016, from NYS Loves Film:
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Millennium Effect. post-production-spotlight-the-molecule-celebrates?utm_
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Doster, A. (2014, March 19). Fighting Over campaign=NYLOVESFILM+Jan+2016+Newsletter&utm_
the Field of Dreams. The Atlantic. Retrieved medium=email
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archive/2014/04/eld-of-schemes/358624/ Governors Ofce of Motion Picture &
Television Development. (2016, June 28). The
Empire State Development. (n.d.). NYS Loves Film. Molecule Moves: Leading VFX Company Expands
to New Headquarters. Retrieved November 29,
Ernst & Young. (2009). Estimated Impacts of the
2016, from NYS Loves Film: http://nysloveslm.
New York State Film Credit.
tumblr.com/post/146616223473/the-molecule-
Ernst & Young. (2012). Evaluating the Effectiveness moves-leading-vfx-company-expands-to?utm_
of State Film Tax Credit Programs. source=FILM+NEWSLETTER+-+June+2016& utm_
campaign=NYLOVESFILM+June+2016+Newsletter&utm_
Governors Ofce of Motion Picture & Television medium=email
Development. (2015, October 29). Post Production in
New York State Continues to Thrive With Opening Governors Ofce of Motion Picture & Television
of Harbor Grand. Retrieved November 29, 2016, Development. (2016, April 28). With Big Plans
from NYS Loves Film: http://nysloveslm.tumblr.com/ for Growth, Phosphene Moves to Hanover Square.

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 Retrieved November 29, 2016, from NYS Loves Film: MNP, LLP. (2014). Economic Impacts of the Florida Film
http://nysloveslm.tumblr.com/post/143548084138/ and Entertainment Industry Financial Incentive Program:
with-big-plans-for-growth-phosphene-moves-to?utm_ Supplementary Report on Film Induced Tourism.
source=FILM+NEWSLETTER+-+April+2016&utm_
Morefoot, A. (2016, October 17). Stage Might.
campaign=NYLOVESFILM+APRIL+2016+Newsletter&utm_
Crains New York Business, pp. 16-19.
medium=email
National Conference of State Legislatures. (2014).
Governors Ofce of Motion Picture & Television
State Film Production Incentives & Programs.
Production. (2015, December 21). New York
Soundstages Receive Funding Through Regional New York State Department of Labor, Division of
Economic Development Council Initiatives. Retrieved Research and Statistics, Bureau of Labor Market
November 29, 2016, from NYS Loves Film: http:// Information. (2014). New Yorks Motion Picture
nysloveslm.tumblr.com/post/135656278283/new- Industry: A Statewide and Regional Analysis.
york-soundstages-receive-funding-through?utm_
NYC & Company. (n.d.). New York City Tourism:
source=+NYLOVESFILM+-+December+2015&utm_
A Model for Success. 2013. Retrieved from http://
campaign=NYLOVESFILM+Dec+2015+Newsletter&utm_
www.nycgo.com/assets/les/pdf/New_York_
medium=email
City_Tourism_A_Model_for_Success_NYC_and_
Henchman, J. (2011, June 2). More States Abandon Company_2013.pdf
Film Tax Incentives as Programs Ineffectiveness
Oxford Economics. (2012). The Economic Impact of
Becomes More Apparent. Retrieved from Tax
the UK Film Industry.
Foundation: http://taxfoundation.org/article/
more-states-abandon-lm-tax-incentives-programs- Preston, P. (2013). State Tax Incentives and the
ineffectiveness-becomes-more-apparent Motion Picture Industry. Journal of the Music &
Entertainment Industry Educators Association, 181-205.
HR&A Advisors, Inc. (2015). Economic Impacts of
the Louisiana Motion Picture Investor Tax Credit. Robert Handeld, P. (2014). A Supply Chain Study
of the Economic Impact of the North Carolina
HR&A Advisors, Inc. (2012). Economic and Fiscal
Motion Picture and Television Industry.
Impacts of the New York State Film Production Tax Credit.
Salama, M. (2009, Summer). State Film Tax
Kemp, S. (2012, September 17). U.K. Tax Credit
Incentives and the Related Potpourri of Federal
Vital to Film Industry Health: Study. Retrieved
Income Tax and Tax Accounting Considerations.
from The Hollywood Reporter: http://www.
Tax Lawyer, p. 1085.
hollywoodreporter.com/news/british-tax-credit-lm-
industry-oxford-economics-370646 Small, O., & Wheeler, L. (2016). A Description of the
Film Tax Credit and Film Industry in Georgia. Fiscal
Lester, J. (2013). Tax Credits for Foreign Location
Research Center.
Shooting of Films: No Net Benet for Canada.
Canadian Public Policy. The Boston Consulting Group. (2012). Evaluating
NYC Media Sector Development and Setting the
Mitchell, H., & Stewart, M. F. (2012). Movies and
Stage for Future Growth.
holidays: the empirical relationship between movies
and tourism. Applied Economics Letters, 1437-1440. The Boston Consulting Group. (2015). The Media

26 Economic & Fiscal Impact Analysis of New York State Film Tax Credit Programs | January 2017
and Entertainment Industry in NYC: Trends and In reporting on the impact of the production tax
Recommendations for the Future. credit program, the study highlights the increase in
the number of projects that occurred in NYS. In 2003
Thom, M. (2016). Lights, Camera, but No Action?
only 18 lms and 7 television shows were shot in New
Tax and Economic Development Lessons From State
York State but that number grew to 181 lms and 29
Motion Picture Incentive Programs. American Review
TV series by 2013. Showcasing the importance of New
of Public Administration, 1-23.
York State in the United States lm industry, the report
Thom, M., & An, B. (2016). Fade to Black? Exploring states, in 2014, a record 15 broadcast pilots will be
Policy Enactment and Termination Through the Rise lming in New York, more than anywhere else in the
and Fall of State Tax Incentives for the Motion Picture country, including Los Angeles.43
Industry. American Politics Research, 1-24.
The Media and Entertainment Industry in NYC:
Twilight. (2014). Retrieved from Discover Forks Trends and Recommendations for the Future
Washington: http://forkswa.com/twilight/
This wide ranging report prepared by The Boston
Verrier, R. (2015, October 31). Film tax credits, new Consulting Group in October 2015 focuses on the
media help revive L.A.s entertainment economy. Los impact of the lm and television production industry
Angeles Times. on New York City as well as the thriving independent
movie scene. The report provides information and data
Photos provided by Empire State Development. related to job growth, spending, and other trends in the
industry and the resulting economic impact on New York
ATTACHMENT C: City. The ndings suggest that Media and Entertainment

ADDITIONAL RESEARCH
is a signicant source of revenue and employment for
NYC and employs over 290,000 FTEs.
New Yorks Motion Picture Industry: A Statewide
The report states NYC is one of only three cities in the
and Regional Analysis
world with a lm community large enough to enable a
Published in June 2014, this report was prepared by the production to be made without needing any roles to
New York State Department of Labor and highlights the be brought in from outside cast, above the line or
growth in traditional lm industry sub-sectors as well as below the line. The Citys ability to attract productions
emerging industries. This report showed that employment is a result of a number of factors including: script, cost,
in the Motion Picture and Video Industries between 2009 preference of key talent, and availability of stages.
and 2013 (time period when the enhanced credit was While there are many benets to working in NYC, the
made available) grew by nearly 30% in New York State report also offers recommendations on ways to mitigate
and nearly 44% in New York City when during that same some of the challenges to shooting and doing post-
period of time the United States as a whole only saw a 6% production work in NYC.44
increase. This report also summarizes ndings of a report
Film tax credits, new media help revive L.A.s
completed by the Boston Consulting Group in 2012 that
entertainment economy
estimated that approximately 130,000 people in New
York City work in jobs directly related to lm and TV. The Published in the Los Angeles Times and written
BCG report also notes reality shows and TV series that by Richard Verrier in October 2015, the article talks
depend on strong city infrastructure and are less mobile about an upswing in lming in the area including a
than one-time lm productions. rise in commercial shoots from carmakers and other

43
New York State Department of Labor, Division of Research 44
(The Boston Consulting Group, 2015)
and Statistics, Bureau of Labor Market Information, 2014)

Economic & Fiscal Impact Analysis of New York State Film Tax Credit Programs | January 2017 27
 big advertisers and new TV shows from cable and found that between 5%
broadcast networks as well as other new media outlets and 19.5% of all visitors
like Amazon, Netix and others. The article cites to Florida are inuenced
Californias new lm incentives, and shifts in other states, in whole or in part by lm
as a signicant reason why there has been a revival of and/or television. Based on
L.A.s entertainment economy. While the incentive in this range of direct impacts,
California has been enhanced the state still can not it is clear that the lm and
compete with states and countries that offer more entertainment industry is a
generous tax credits for large blockbuster lms.45 signicant contributor to
the economy. The survey
Some states yell, Cut! on lm tax credits
was based on visitors who
This article, written by Elaine Povice for the Pew had been to Florida in the past year and did not include
Chartable Trusts, focuses on the changes in lm information about the specics of their travel.
industry tax credits that have occurred throughout the
United States in recent years. Some states have been This report also conducted a state and local government
expanding their offerings, like California, while others return on investment calculation to compare the amount
are terminating their programs like Alaska. The article of tax credits issued with the tax revenue generated.
also states that studios are shopping around when The analysis found that state and local governments
deciding where to locate their productions in order to ROI is between 10 and 38, in other words for every $1
take advantage of the best credit programs. Production of tax credit issued the state and local governments
managers state that the tax incentives are one of the earn between $10 and $38 in tax revenue.46
rst things they consider when deciding where to shoot.
Economic Impacts of the Louisiana Motion Picture
State Film Production Incentives & Programs Investor Tax Credit

This document, published in March 2014, provides a Completed in 2015 by HR&A Advisors, Inc., this report was
brief summary of the growth of lm industry incentives commissioned by the Louisiana Film and Entertainment
in the United States and provides an updated list of the Association and the Motion Picture Association of
types of incentives offered. This document was helpful America to study the impact of the Louisiana State
in understanding how New York State relates to the Motion Picture Investor Tax Credit. First introduced in
other states in terms of incentives being offered. 2002 as a way to enhance the states competitiveness as
a place for motion picture and television production, the
Economic Impacts of the Florida Film and
state currently provides a 30% base tax credit on qualied
Entertainment Industry Financial Incentive Program:
production spending and another 5% credit for payroll
Supplementary Report on Film Induced Tourism
expenditures to Louisiana residents. The study found
In addition to an analysis of the incentive program, that following the enactment of the tax credit program
Florida commissioned a report in January 2014 that the states motion picture and television employment
looked specically at how the lm industry impacted increased by 595% while the employment in the industry
the tourism industry in a state with a large existing in the US only increased by 12.4%. The study also found
tourism industry. This report is particularly interesting that 14.5% of domestic, out-of-state, visitors who recently
because, like New York City, Florida has a strong tourism traveled to Louisiana were induced by the motion picture
industry even without lm-induced visitation. The report or television industry. 47

45
Verrier, 2015 47
HR&A Advisors, Inc, 2015
46
(MNP, LLP, 2014)

28 Economic & Fiscal Impact Analysis of New York State Film Tax Credit Programs | January 2017
A Description of the Film Tax Credit and Film the 30-Mil zone and for visual effects and music
Industry in Georgia scoring/recording performed in-state. 49

Prepared by the Fiscal Research Center in 2016, this More States Abandon Film Tax Incentives as
policy brief provides a summary of Georgias lm tax Programs Ineffectiveness Becomes More Apparent
credit program and how it has contributed to the states
This article written by the Tax Foundation in June 2011
rise in prominence in the lm industry. The brief goes on
to say that in 2015 Georgia law makers decided to limit summarizes some of the controversies surrounding
their lm incentive program while other states, including incentive programs in the United States and specically
Michigan and Alaska, have decided to terminate their whether the incentives for the lm industry are effective
programs. The article states that the reason that there in their effort to encourage economic growth and raise
is hesitation around these types of tax credit programs tax revenue. The article highlights states that have
is that the lost tax revenues are very well dened suspended or eliminated their programs, states that
and visible, while the benets from employment and have reduced their available incentives, as well as
overall economic growth are much harder to quantify. the states that have expanded or strengthened their
The article cites an analysis conducted by the Georgia program. The recommendation of the report is that
Department of Economic Development that found that states require reporting about the amount of incentives
there were hundreds of feature lms, commercials, and provided per Full-Time Equivalent job created and
television productions shot in Georgia resulting in an that the effectiveness of the programs be reviewed
overall economic impact of $6 billion for the state. 48 periodically.50

California Film & Television Tax Credit Program: The Economic Impact of the UK Film Industry
New Program Summary - AB 1839
This report by Oxford Economics studied the lm
This summary sheet provides information about the industry in the United Kingdom, the impact of the lm
recently updated lm and TV tax credit program for industry, and the role that the Film Tax Relief program
California productions. Key changes include: (incentive program) plays in sustaining the lm industry
in the UK. The report estimates that, without the tax
Increase in total program funding from $100 million
relief program, lm production in the UK would decrease
to $330 million per scal year;
by 71%. The report also nds that the program has a
Expansion of program to big-budget feature lms, positive return on investment (1 of incentive generates
1-hour TV series and TV pilots; 12 in GDP), has led to signicant investment in studios
and other infrastructure, and has generated tourism
Creates tax credit eligibility for rst $100 million from overseas.51
in qualied spending for studio lms and rst $10
million in qualied spending for independent lms; Lights, Camera, but No Action? Tax and Economic
Development Lessons from State Motion Picture
Elimination of the states tax credit lottery and is using Incentive Programs
a jobs ratio formula and other ranking criteria;
Published in the American Review of Public Admini-
Penalty for projects that overstate job creation; stration, this report by Michael Thom attempts to
evaluate the impact of motion picture incentive (MPI)
Multiple allocation periods throughout the year; and,
programs on the ability for states to entice lm and
Increased benet for productions that lm outside television productions out of California and New York.

48
Small & Wheeler, 2016 50
Henchman, 2011
49
California Film Commission 51
Oxford Economics, 2012

Economic & Fiscal Impact Analysis of New York State Film Tax Credit Programs | January 2017 29
 The report summarizes that there are 30 states that Fade to Black? Exploring Policy Enactment and
offer tax credit programs (18 offer transferable credits Termination Through the Rise and Fall of State Tax
and 12 offer refundable credits) and 32 offer tax waivers Incentives for the Motion Picture Industry
including sales tax waivers and/or lodging tax waiver.
This report was published in the American Politics
The ndings of the analysis highlighted that domestic Research journal in August 2016 and takes a close
and foreign competition for the motion picture related look at the Motion Picture Incentive programs enacted
jobs and spending has created a situation where state and some later repealed in 45 states. The analysis nds
governments are spending billions of dollars on MPI that while enactments were often a reaction to rising
programs. The statistical analysis found that states unemployment and national trends, many states found
efforts to entice entertainment industry jobs out of it hard to terminate the programs once unemployment
California and New York had little to no sustained started falling due to the inuence of incentive spending.
impact on employment or wage growth and that none The report states tax incentives are durable most MPIs
of the incentives affected motion picture industry GSP persist despite skepticism over their effectiveness- but
or concentration. Another nding was that transferable not immortal, and the conditions inuencing enactment
credits had small but positive and sustained impacts on and termination are not consistently mirror images of
employment growth, but no effect on wages whereas each other.53
refundable credits had no effect on employment but
positive yet temporary inuence on wages.52

52
Thom, Lights, Camera, but No Action? Tax and Economic Development Thom & An, Fade to Black? Exploring Policy Enactment and Termination
53

Lessons From State Motion Picture Incentive Programs, 2016 Through the Rise a Fall of State Tax Incentives for the Motion Picture Industry, 2016

30 Economic & Fiscal Impact Analysis of New York State Film Tax Credit Programs | January 2017
This report was produced
in partnership with:

120 West Avenue, Suite 303

Saratoga Springs, NY 12866
518.899.2608
www.camoinassociates.com

@CamoinAssociate

Economic & Fiscal Impact Analysis of New York State Film Tax Credit Programs | January 2017 31