[vc_row][vc_column][vc_column_text]The state Senate approved a major expansion of New Jersey’s film, television and digital media economic incentive program, leaving the proposal’s legislative fate to the Assembly.

If the lower house clears its version, it would have to be reconciled with the measure passed by the Senate before it goes to Gov. Phil Murphy. The governor has been supportive of the incentive program and signed a 2018 law bringing it back. But his office has not commented on the proposed Senate Bill 4094.

The Dec. 20 Senate vote was 31-5.

Under the film tax break program, the state compensates producers for filming scenes in New Jersey and buying in-state goods. Murphy signed one expansion in January 2020, and another as part of the $14.5 billion economic subsidy program he approved earlier this year.

State officials have used the program to attract such productions like “Joker” and “West Side Story.” In addition, Netflix is reportedly considering a film studio in the Garden State, while NBCUniversal uses the former Meadowlands arena.

Many production companies have cited the tax credit program as a significant factor in their decision to come to New Jersey a less expansive, though still nearby, alternative to New  York that offers urban, rural and scenic landscapes.

“It’s allowed us in the industry to continue to employ people in the Garden State and use vendors and become a catalyst for growth during this bad time,” said Angela Miele, an executive with the Motion Picture Association.

But critics have questioned the economic benefits and efficacy of the incentive program and other state tax breaks.

Lawmakers are proposing to widen the array of benefits that film, television and digital media producers could claim, and to allow payments to big-name actors, directors and screenwriters to count toward the total tax break amount. Currently, payments above $500,000 to any “highly compensated individual” cannot be used to calculate credits.

The yearly program cap on digital media productions would increase from $10 million to $30 million, while the tax breaks for those kinds of productions would increase to 35% of the expenses incurred in South Jersey in an effort to draw productions beyond the New York City area, and 30% in the rest of the state.

Lawmakers are planning to extend the program to 2034, rather than the original sunset date of 2028. And the tax credits could be counted against gross income tax, instead of solely the corporate business tax under the current law.

There would be a “diversity bonus” for hiring film crew members in minority groups typically “underrepresented” in film and media productions, or for hiring workers that reside in the municipality where the filming occurs, or who belong to a labor union.

The state would create “studio partners” in 2025 – three major studios that relocate to New Jersey for at least a decade would be able to tap into an added $350 million of state subsidies. That’s on top of the existing $100 million in the program, and according to the bill comes out of any unused dollars from other economic incentive programs.

Proponents also propose to loosen the rules so that studios would no longer need to be the sole owner of a facility to qualify for the incentives. Instead, they would only need to lease at least 50,000 square feet and commit to spending an annual average of $50 million for the next five to 10 years.

Some lawmakers, including Assemblywoman Aura Dunn, R-25th District, worried that easing the rules for film studios would mean these companies would be doing less for the state.

“I do not think we need to be increasing tax cuts for Hollywood film productions,” added Sen. Nia Gill, D-34th District, on Monday. “We need to be looking at how we can make our state more affordable for families and small businesses.”[/vc_column_text][/vc_column][/vc_row]