The state’s film tax credit program has become a popular tool for luring media productions to the state, with demand outstripping the funds available in the program.
As a result the program will have to be expanded, as Gov. Phil Murphy proposed last week at an event in Rowan University, or some businesses will miss out.
According to the Economic Development Authority, which oversees the state’s Garden State Film and Media Digital Jobs Act, there is $52.6 million left of the $75 million allocated for the tax credits in the fiscal year that ends June 30, 2020.
But 15 companies are seeking a combined $62.9 million of incentives under the program, according to the EDA, more than $10 million than what the state budgeted for the tax credits. The agency released the figures at its Oct. 8 board meeting.
The agency approved a $2.8 million tax break to Event Services Inc. for its production of “Wrestlemania XXXV” and $10 million for Random Productions LLC for its six-part miniseries “The Plot Against America.”
The program provides a 30 percent tax break for filming in New Jersey; the incentive is 35 percent for filming in Atlantic, Burlington, Camden, Cape May, Cumberland, Gloucester, Mercer or Salem counties.
Murphy last week proposed extending the program and increasing the size of the grants, reasoning that the state stands to benefit from the typically longer-lasting television productions.
“If a television pilot takes hold and it’s successful, that can be an eight or 10-year run, and those are big money-spenders,” Murphy said. “Movies are great but they come and go. TV programs, if they’re hits they last.”
But critics of the film tax credit suggest that the state could bleed money over time because the program lacks a net benefits test, which is a formula the state uses to determine whether the economic benefit of a project exceeds the incentives offered to attract it.
A 2018 analysis by the nonpartisan Office of Legislative Services found that the state could lose $425 million in revenue over the life of the program without the test.
Several prominent productions recently have been filmed in New Jersey after receiving incentives, such as WB Studio Enterprises Inc.’s film “Joker” which was shot in Newark, and Steven Spielberg’s remake of “West Side Story” which is being produced in Paterson.
“The payback is immediate,” Murphy said last week. “This comes to town, the circus comes to town … and you get immediate payback.”