The state’s Economic Development Authority approved corporate tax breaks at its Aug. 13 board meeting to the film producers of “Joker” and “West Side Story,” filmed in Newark and Paterson respectively, under its film tax incentive program enacted last year.
WB Studios Enterprises Inc., which produced “Joker” – a story line based on the villain of the same name in the Batman franchise, and scheduled to hit movie theaters in October – filmed in locations including Newark and Jersey City, and spent $89 million on production, for which they received a $1.9 million tax break.
Twentieth Century Fox Film Corp. spent $121 million, for which they won a $6.7 million tax break, on its production of “West Side Story,” the film adaptation of the 1957 Broadway musical of the same name. Directed by Steven Spielberg and featuring screen writing by playwright Tony Kushner it will be filmed in Paterson and completed in April 2020. This “modern-day Romeo and Juliet” will follow the story of two New York street gangs as they battle for control over the “harsh streets” of the Upper West Side.
“These two major productions are bringing jobs to our state and bolstering the economy of New Jersey while supporting our diverse communities,” Gov. Phil Murphy said in a statement. “I am proud to see the film industry growing and thriving in the Garden State and excited to see New Jersey become the backdrop for more movies and television shows in the future.”
In June, the EDA approved its first round of film tax breaks—$6 million spanning four separate awards.
Film tax credits are capped at $75 million a year while digital media tax breaks are capped at $10 million a year. The credits cover up to 30 percent of expenses for film productions between 2019 and 2023, or 35 percent if they film in South Jersey. Digital companies can apply for tax breaks up to 20 percent, or 25 percent if they set up shop in South Jersey.
Opponents of the program worry the state could bleed out money over time because the program lacks a net benefits test – a formula used to determine how money the state spends on tax breaks for a company is exceeded by the amount of economic activity that the business generates for the state.
An analysis last year from the nonpartisan Office of Legislative Services found that the state could lose $425 million in revenue over the life of the program, or $85 million a year, because it lacks a net benefits test.
But supporters of the program argue the costs will be far exceeded by the business and economic activity that the incentives generate. Indeed, WB Studios spent $8.6 million on New Jersey businesses during its production of “Joker,” while Twentieth Century spent $7.9 million on New Jersey businesses.
“Film and television production offers many economic benefits including new jobs and support for local small businesses, and this powerful incentive, along with New Jersey’s diverse population and landscapes, make a compelling case to producers that New Jersey is the ideal place for their next project,” EDA Chief Executive Officer Tim Sullivan said in a statement.