A new study from the Garden State Initiative (GSI), a New Jersey think tank, suggests that New Jersey’s entertainment industry subsidies aren’t worth the price. In fact, they may be net losers for state taxpayers.
“Under the Murphy Administration, New Jersey has greatly expanded subsidies for film and video production, yet scant evidence exists that these subsidies generate any growth at all, let alone enough to cover their cost,” said Dr. Charles Steindel, a former chief economist for the State of New Jersey. “Pledging annual credits equal, or close to 1% of the state budget to this program is ill-advised, particularly since this industry accounts for a fraction of New Jersey’s economy.”
The math is jarring. All economic activity in the state, annually, adds up to $800 billion. Meanwhile, the total 2023 wages of film and video workers in the state equates to a mere $300 million. According to GSI, “New Jersey, like many other states, offers transferable corporate tax credits to the film industry starting with 30% of production costs outside of New York City and 35% elsewhere in the state up to an annual limit of $430 million a year allocated through the state’s Economic Development Authority (EDA).”
Said another way: it doesn’t add up.
“This report aligns with similar research in other states confirming the limited value in film tax credits for New Jersey taxpayers,” said GSI President Audrey Lane. “Given New Jersey’s current economic and fiscal challenges, the decision to expand these Hollywood tax credits is perplexing.”
“Thank you, Dr. Steindel and GSI, for once again documenting the unvarnished, if unwelcome truth: film and production tax credits are great politics but lousy economic development policy,” added former NJ State Treasurer Andrew Sidamon-Eristoff. “New Jersey’s taxpayers deserve better.”
Click here to read the full report.
