Bill Would Improve Program Following Suspension In Current Budget
Legislation sponsored by Assembly Democratic lawmakers Albert Coutinho, Annette Quijano, Craig J. Coughlin and Louis D. Greenwald to expand New Jersey’s film and digital media production tax credit once it’s restored in 2011 was approved by both legislative houses on Monday.
The bill (A-2905/S-690) as of July 1, 2011 increases the annual program cap for the film production tax credit from $10 million to $50 million and for the digital media production tax credit from $5 million to $10 million.
The bill also provides for a tax credit equal to 22 percent, instead of the current 20 percent, of eligible production expenses if the expenses represent purchases of goods from businesses located in Urban Enterprise Zones or purchases of services performed by residents of a UEZ.
The measure is part of the Legislature’s Back to Work NJ job creation and economic development package.
“We’re upgrading and restoring New Jersey’s ability to attract film and digital media productions that have added so much to our economy in recent years, at least until the credit was suspended this year under Gov. Christie’s budget,” said Coutinho (D-Essex). “We need to fix the mistake that was made when this credit was suspended and ensure this tax credit is an even more valuable economic development tool for New Jersey.”
“We’ve already seen the damage that’s been done by suspending this credit with the departure of several productions that pumped millions of dollars into our local economies,” said Quijano (D-Union). “We need to make sure this doesn’t happen again and that this vital incentive becomes an even bigger job creator for New Jersey.”
“Suspending this tax credit was a major blow to our economy, but it’s hopefully one we an fix through this legislation,” said Coughlin (D-Middlesex). “We need to give film and digital media production companies confidence in New Jersey and keep high-paying jobs and revenue-generating companies in our state.”
“As a sponsor of the initial film and digital media tax credit, I know full well the value it brought into New Jersey and the economic benefits that will be missing if we don’t take this step to restore and expand the credit,” said Greenwald (D-Camden). “Successful programs that create jobs and economic development must be nurtured, not trashed, and this bill is a step back in the right direction.”
An Ernst & Young study of the economic and fiscal impacts of the New Mexico film production tax credit concluded that 2007 film productions generated 9,209 jobs in New Mexico, $487.5 million in additional income and $891.8 million in additional economic activity.
A June 2009 study of Pennsylvania’s Film Production Tax Credit conducted by Economic Research Associates yielded similar positive results.
“Viewed from this angle, it is discomfiting that New Jersey’s $10 million cap on its credit leads to applicants being turned away,” Coutinho said. “By strengthening New Jersey’s film production tax credit, we will back a proven tool to grow the state’s movie industry and economy as a whole.”
The bill was approved in the Assembly by a vote of 48-17-12.