Gov. Phil Murphy, on the evening Jan. 12, approved a major expansion of New Jersey’s film, television and digital media tax break program just two days after lawmakers sent the proposal to his desk, as the state eyes how to boost its sluggish economic recovery amid 22 months of the pandemic.
Under the film incentive 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 a year ago.
The program has been used to lure such productions as “West Side Story,” “The Equalizer,” “Joker” and “The Many Saints of Newark,” all of which had shots filmed in the Garden State.
Murphy, in the Wednesday evening announcement, characterized the incentive program as having “ brought numerous productions to our state, creating jobs for New Jerseyans, and bringing in money that is being spent with local businesses.”
“This legislation will ensure that our state remains a top destination for some of our country’s most significant film and TV productions,” he continued.
The New Jersey Economic Development Authority, which oversees the program, said that since 2018 the state has approved 49 film and TV projects that saw more than $635 million of spending in the state economy.
“New Jersey offers significant advantages to productions seeking a vast and diverse on and off camera talent pool and an array of authentic sites for all sorts of productions,” added NJEDA Chief Executive Officer Tim Sullivan.
Many production companies have cited the tax credit program as a significant factor in their decision to come to New Jersey, a less expensive, though still nearby, alternative to New York that offers urban, rural, and scenic landscapes.
Angela Miele, an executive with the Motion Picture Association, told lawmakers last year during a remote hearing on the expansions that the program “allowed us in the industry to employ people in the industry to continue to employ people in the Garden State and use vendors and become a catalyst for growth during” the pandemic.
But critics have questioned the economic benefits and efficacy of the incentive program and other state tax breaks. A note released Jan. 10 by the nonpartisan state Office of Legislative Services said that an expansion of the digital media tax credits by $20 million each year could mean the state would lose another $240 million over the next 12 years.
“Sure, you can make the argument that the tax credits can be the tipping point” for productions to come to New Jersey, “ but I don’t know if it’s even worth that in the long-term,” said Sheila Reynertson, a policy analyst with the progressive think tank New Jersey Policy Perspective. “What’s the growth-rate after 10 years of giving those away? You’re not seeing it, no matter how hard you make it work or how attractive you make your tax credits.”
The expansion creates new bonuses and tax breaks for big-name actors, directors and screenwriters and broadens the awards available for digital media productions. The program will be extended to 2034, and production companies can get new bonuses for diversifying their film crews, and for building new film studios that are in New Jersey for at least a decade.
Digital media projects can get tax credits of up to 35% of their expenses incurred in South Jersey and 30% in the rest of the state.
“Based on the numerous amount of inquiries we are now receiving, it appears that 2022 will another very successful year for New Jersey’s film and television industry,” reads a statement from Steven Gorelick, executive director of the state’s Motion Picture and TV Commission, which is also involved with the tax break approval process and coordinates many productions in New Jersey.e