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Commentary By Seth Barron

Top Amazon Enemies Still Back Some Obscene Corporate Subsidies

Cities New York City

The New York politicians who scuttled the Amazon deal claim they oppose corporate subsidies in principle. Sweetheart deals are “long discredited economic-development policies,” said state Sen. Michael Gianaris, perhaps the most outspoken HQ2 opponent.

City Council Member Jimmy Van Bramer likewise called the HQ2 deal a “scam,” in which Amazon was shaking down New York and “picking its pockets.”

Hypocrisy much? Gianaris and Van Bramer both support subsidies for their preferred industry — namely, film and television producers.

Gianaris’ objections are especially rich. This vocal critic of taxpayer subsidies to big, rich corporations has long been a prominent cheerleader for the New York State Film Tax Credit, which gives studios tax credits based on the amount of money they spend on film or TV production in the Empire State.

The program, which has been in operation for the last 15 years, ­offers a 30 percent rebate on all “below-the-line” production costs, which include the local crew and staff who haul and set up the lights and cameras and those craft-service tables that you see at film locations around the city on any given day.

The deal that Amazon was supposed to get amounted to $3 billion in tax abatements and other goodies, which is a lot, even when spread out over 20 years. But the movie industry gets at least $420 million every year (though less conservative estimates put the figure at $650 million), and the money comes in the form of ­refundable tax credits.

That means the credits can be cashed in on ­receipt or sold to some other entity, which may not even do any business in the state. Over the years, film and TV studios have raked in billions of dollars in cash from New York taxpayers with this neat trick.

Gianaris has praised the film-tax credit. He was an original sponsor of the program. And he has advocated vigorously for its renewal. He has compared it to an investment, like a family’s 401(k), and called it “the single most successful economic-development program in the last decade,” given all of the jobs it has created.

Meanwhile, as chair of the City Council’s cultural affairs committee, Van Bramer has been a major booster of city subsidies for the film industry, which include free permits, free locations, free police protection and no sales tax on production-related “consumables,” in addition to various monetary grant programs and free marketing on buses and subways.

Yes, lots of movies and TV shows get filmed in New York City. But it’s less clear whether this owes to all the cash handouts that we give to producers. For one thing, according to data from the Federal Reserve, the number of motion-picture and sound-recording jobs in New York hasn’t changed much since 2013.

Then, too, many of the shows and movies that we are paying for would be filmed here anyway: Can anyone imagine, for example, that “Saturday Night Live,” which has received close to $50 million in tax credits, will pull up stakes and start filming in New Jersey or Toronto if the subsidies dry up?

That’s why E.J. McMahon of the Empire Center for Public Policy has called the subsidy “the single largest and most outrageous corporate giveaway on the books in New York today — bar none.”

So why do Gianaris and Councilman Van Bramer love the film-production tax credit so much, even though it is — like the Amazon plan — patently a bribe to a fantastically rich industry?

Take a look at their campaign-finance filings.

Gianaris, who started his career at the feet of disgraced Assembly Speaker Shelly Silver, the master of pay-to-play, has taken many tens of thousands of dollars in contributions from Silvercup Studios, Broadway Stages and Kaufman Astoria Studios, as well as from the Theatrical Teamsters ­Local 817, all of which count on the extra business that comes from the studios getting a 30 percent rebate on their costs.

Van Bramer has likewise received thousands of dollars in campaign contributions from the owners of local soundstages.

It may be that the Film Tax Credit program is a supremely effective way to give billions of tax dollars to private corporations in order to get them to hire New Yorkers. But that’s the same argument made by the supporters of the Amazon deal, who were ruthlessly mocked as sellouts by the leftists who derailed it. Michael Gianaris and Jimmy Van Bramer should explain why some companies deserve our money and others don’t — and let’s hope “they donated to my campaign” isn’t the main excuse.

This piece originally appeared at New York Post


Seth Barron is an associate editor of City Journal and project director of the NYC Initiative at the Manhattan Institute.

This piece originally appeared in New York Post