By Maddie Orton
Peter Meister relies on production companies choosing to shoot in New Jersey. His Ironbound Film and Television Studios houses production equipment, several stages and even on-location housing. But, in the four years since he and his collaborators set up shop, they’ve run into a road block.
“When we get a phone call about using our facilities and our studios, one of the questions is, ‘Do you offer a tax credit in New Jersey?'” said Meister. “And we say, ‘No.’ And that pretty much finishes the conversation.”
State film tax credits are used as an incentive to attract production companies in an effort to create jobs and boost local economies. New Jersey’s program sunsetted in June last year, and this week Gov. Chris Christie vetoed a bill to reinstate and expand it.
Previously, if a film or TV company spent 60 percent or more of a project’s total budget in the state, they’d be eligible for 20 percent of that money back in the form of a tax credit, which they could either use to offset taxes or sell.
For example: “Productions come in — like ‘Cadillac Records’ shot for $2 million, they got a 20 percent tax credit on their budget,” explained Director of Newark’s Office of Film and Television Kenneth Gifford.
Under the old program, a maximum of $10 million could be distributed to film and television production companies annually. The recent bill would have increased that annual spending cap from $10 million to $50 million.
In his veto, Christie cited a questionable return on investment: “…the Legislature has chosen to advance an expensive bill that offers a dubious return for the State in the form of jobs and economic impact…”
“Bullfeathers,” said Sen. Ray Lesniak. “We saw the jobs lost. There’s empirical evidence.”
Lesniak co-sponsored that bill. He says production companies are now choosing to go to neighboring New York instead, where tax credits are available. Meaning less money for New Jersey’s local economies.
“Without the tax credits, we get no income at all,” said Lesniak. “And 80 percent of something is a lot better than 100 percent of zero.”
Assemblyman Jon Bramnick voted against the bill. He says he doesn’t oppose the idea, but it’s a matter of priorities.
“If we’re going to lower taxes and give credits, we’re going to give it to the working families first,” Bramnick said. “After families get all the credits they need, then we’ll start talking about Hollywood companies.”
There are varying numbers thrown around on the program’s value, and differing opinions on whether the absence of financial incentives really deters companies from filming here.
A 2011 State Treasury and Economic Development Authority analysis shows the program produces questionable financial returns. Alternately, a 2010 NJIT study shows it provides a boost in local tax revenues and jobs.
As for Meister, he says his local businesses just want production companies to keep coming.
“The local Dunkin’ Donuts and the gas station and the lumber yard have all told me that they really like it when a production comes in town,” Meister said, “because they see their business really skyrocket.”
Sen. Lesniak says a change to the film tax credit decision will likely only come with a change in the administration.