New York State’s Post-Production Tax Credit produces $156 million dollars in tax revenue annually and delivers an eightfold return on fiscal investment, according to a new economic impact study commissioned by the Post New York Alliance.
Conducted by H&RA Advisors, the study further shows that, while employment growth across all industries in the state has averaged a mere two percent annually since 2015, post-production employment across that same period shot up 25 percent.
“The PPC has been great for the post-production industry and fantastic for the broader New York economy,” says PNYA chair Yana Collins Lehman. “For every dollar in tax credit, the industry returns eight dollars in revenue. In terms of job growth, the multiplier effect is profound.”
The increase in post-production employment can be tied directly to the impact of the PPC.
Static prior to the establishment of the program in 2010, employment has been rising steadily with nearly 3,000 post-production jobs created since 2015 when the H&RA study was first conducted.
Membership in the Motion Picture Editors Guild, Local 700, has increased 30 percent in just four years, creating new opportunities for well-paying, union jobs. Average employment among post-production companies has increased from 8.3 to 10 employees per facility. The industry’s success has also led to greater diversity in hiring and an expansion of training programs for underrepresented groups.
The benefits produced by PPC are broad. While PPC data shows an annual average of 1,500 direct hires under the tax credit, each of those jobs supports 8.3 additional jobs in the form of independent contractors, management, and other business and administrative employees. Additionally, the post-production ecosystem generates roughly 15,000 “economic multiplier” jobs each year outside of the ecosystem, for a total of more than 29,000 jobs.
As good as those results are, PPC could be even more successful. The program suffers from an approval and issuance process that is time-consuming and requires companies to carry costs on their balance sheets over several years, something beyond the capacity of many smaller companies.
Continued investment in the program is essential. New York post-production companies face increased competition from companies in other states, including Connecticut, Georgia, Nevada, New Jersey, and New Mexico, which also offer tax incentives. Although New York post-production companies have unique advantages in terms of an established infrastructure and experienced talent, high labor costs in the state exert competitive pressure.
New York’s post-production industry fared relatively well during the pandemic through the hard work and creativity of many companies and individuals, but the industry’s future growth depends on the PPC. “We are a resilient industry,” says Collins Lehman. “We’ve taken advantage of the tax credits to grow businesses and produce new jobs. Film and television production is predicted to grow in the coming years and, with support from the state through the PPC, New York will continue to be a very attractive destination for studios and producers.”
The PNYA supports Governor Kathy Hochul’s current proposal to extend the Film and Tax Credit for five years and raise credits from $420 million to $700 million per year, including an increase in credits for post-production activity from $25 million to $45 million. The governor’s proposal, part of her budget now before the state legislature, includes such other important provisions as returning the base credit to 30 percent, accelerating the time productions can claim their credit and new incentives for productions relocating to New York.
“This proposal sends a clear message that Governor Hochul is committed to keeping New York competitive while supporting and growing the film and television industry throughout New York,” Lehman Collins says.