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Home > Columnists > Alice Park
December 08, 2011

Dems, GOP fight out bogus film tax credit program


Academy Award nominee Robert Loggia, Frank Giglio, and Miguel Jarquin-Moreland in a scene from Kenneth Del Vecchio's The Great Fight, which was shot throughout Bergen County. ()

By ALICE PARK
     News Editor

   Digital media, film and television production crews, and related companies are crossing the border, to the other side of the Hudson River, into New York City, where they can reap the benefits of the Big Apple’s film tax program—an incentive program that New Jersey once boasted. New Jersey used to be home to the set of the exceedingly popular cop drama, “Law and Order: SVU.” New Jersey was also the location of Academy Award-nominated film, The Wrestler and well-liked movie, Julie & Julia. There was a time when corporations, such as Columbia Pictures and NBC, flocked to the Garden State to take advantage of the 20% tax credit of qualified production expenses offered to production companies that met the following criteria: “At least 60 percent of the total expenses of a project, exclusive of post-production costs, will be incurred for services performed and goods used or consumed in New Jersey,” and “Principal photography of a project commences within 150 days after the approval of the application for the credit.” To the rue and lament of many of New Jersey’s legislators, the entertainment industry and the state’s economy, Governor Chris Christie vetoed legislation to expand the state’s film and digital media tax credit.

   Senate Budget and Appropriations Chairman Paul Sarlo (D-Bergen) said, pointing to figures detailed in Crain’s New York Business, “Instead of fostering productions here and helping local businesses, the governor’s shortsightedness in ending New Jersey’s film tax credit is giving New York a real big economic boost. These are jobs and economic benefits we can’t afford to be passing up.” The report, released last week, indicated that while most sectors of the economy in New York City continue to be at a stalemate, “the number of television and film production jobs in New York City jumped to 43,000, an increase of 22% over the previous year.” Senator Loretta Weinberg (D-Bergen) jumped to her colleague’s side and added, “New Jersey has essentially made a policy decision to give up on thousands of jobs and millions of dollars that a robust film industry would bring to the state. Legislative Democrats have fought to make Governor Christie and his administrations see the light on his short-sighted policies…Now we have independent verification.”

   Kenneth Del Vecchio, a critically acclaimed filmmaker and best-selling author, who has produced over 15 movies – and more movies in New Jersey than any other independent filmmaker in the past dozen years – said that Christie’s dismantling of the bill “doesn’t matter.” Del Vecchio, who also founded and chairs the state’s largest film festival, Hoboken International Film Festival and is a former judge, added, “New Jersey’s film tax credit program was a joke. All filmmakers and attorneys understand this. The program was a mirage, which was unattainable for almost all in the film business. Only the largest of studios and networks could access the tax credits, with a few scraps thrown to the balance of filmmakers.” Del Vecchio, whose movies star several Academy Award and Emmy winners and nominees, never utilized the New Jersey tax credit program and said that he’s never met a filmmaker who has, and that “includes several thousand filmmakers who have submitted to my festival.”

   “Other states have real programs like Connecticut,” Del Vecchio said, referring to the state where he shot his 2009 flick, Fake, which will be released by Millennium Entertainment next year. “Although Connecticut has downgraded its tax incentive program since I shot there, it’s still leaps and bounds more legitimate than New Jersey’s past alleged program.” Del Vecchio, who has shot eight films in New Jersey in just the past four years – all which have received substantial distribution through leading companies such as ICAP Media, Universal’s Vivendi Entertainment, Anchor Bay and Palisades Tartan Films – continued, “I never relied on this bogus program, but still produced my films here at home. It’s because of the people in New Jersey. People are excited about movies, and they want to get involved. I have gotten numerous wonderful locations at very low cost, and vendors provide great deals to be part of the action. Also, crew and actors are motivated and plentiful in New Jersey. In other words, all this wind bag talk from these politicians is a heap of nonsense. Filmmakers can easily shoot economically in New Jersey.”

   The New York State Film Production credit provides a 30% credit for qualified production expenditures for all eligible productions shot in New York City. Since the new legislation in August 2010, the program has been extended through 2014 with a funding of $420 million per year.  Despite higher production costs in the Empire State, the highly incentivized tax program makes New York much more appealing, specifically to those giant networks and studios.  HBO choose Long Island over New Jersey, even when creating a show about Atlantic City—“Boardwalk Empire.”

   This is not that first time Senators Sarlo and Weinberg have waged war against Governor Christie over the film tax credit issue. In March, the Bergen County Dem duo sponsored a bill: “Garden State Film and Digital Media Jobs Act,” which would have had an annual program cap of $50 million for film productions and $10 million for digital media productions. Not really all that surprisingly, Christie vetoed it. The Democrat legislature made an attempt to override Christie’s veto. Unfortunately, the legislation did not receive enough support from Republicans to succeed. President of New Jersey Policy Perspective Deborah Howlett, in support of the GOP legislators said, “We believe the film industry will come to New Jersey without any incentives from the state. It may create a few more jobs, but the investment it takes really isn’t work the return.”   According to a memo from the chief economist of the New Jersey Department of Treasury, “the credit has produced a net loss to state revenues.”

   Del Vecchio, who is also the publisher of Garden State Journal, had this to say about the Sarlo/Weinberg proposed bill: “It seems to be on par with the prior program that the governor abolished. So, its value is just about worthless to the vast majority of the film community. However, I would make my final analysis upon its implementation. As of now, however, it has been vetoed, so we’ll probably never see it in action. If Governor Christie decides to initiate a new, real tax incentive bill, that would be a boon. Maybe that’s why he eliminated the twaddle that was in place.”

 

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