TRENTON, N.J. (AP) — The Assembly is due to vote this week on plans to reinstate and expand New Jersey’s tax credit program for film and digital media production.
The $15 million program, which provides 20 percent credits to companies that meet benchmarks for in-state hiring and spending, was suspended last year. That came as Gov. Chris Christie worked to close an $11 billion budget deficit.READ MORE: Stimulus Check Update: When Could Another Economic Relief Payment Arrive?
Critics have derided the credits as an unnecessary handout to Hollywood. When they were suspended, officials ordered a study to determine the program’s effectiveness and whether it provided sufficient economic benefits for the state.
But the study’s findings haven’t yet been released. And some lawmakers say a vote on the program should be delayed until those results are disclosed.
“There’s been a lot of back and forth on this, and I think we should wait for a subjective report to have an answer as to whether this program creates jobs here,” said Assemblyman David Wolfe, R-Brick. “If the study shows that it’s beneficial for New Jersey, I would likely support it. But until we know that answer I think we should reserve judgment.”
Proponents say the tax credits are a valuable economic development tool that need to be quickly restored. Forty-four states and the District of Columbia have tax credit programs for production companies. Some offer credits as high as 35 to 40 percent.
“Suspending this tax credit was a major blow to our economy, but it’s hopefully one we can fix through this legislation,” said Assemblyman Craig Coughlin, a Woodbridge Democrat who is one of the bill’s primary sponsors. “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.”
If the measure scheduled for a vote Monday eventually becomes law, the credits would be restored on July 1.READ MORE: Wife Of Top Cuomo Aide Shows Support On Social Media For Governor's Latest Sexual Harassment Accuser
The legislation calls for raising the film production credit program’s annual cap from $10 million to $50 million, while the digital media program’s cap would go from $5 million to $10 million.
It also calls for boosting the tax credit to 22 percent in certain cases.
The higher credit would apply to eligible production expenses that involve the purchases of goods from businesses in the state’s urban enterprise zones, or services performed by firms based in those zones.
According to the Motion Picture Association of America, about 7,000 direct jobs were related to productions in New Jersey in 2008, an increase of nearly 1,000 jobs from 2006. New Jersey vendors received about $507 million in business from production companies, compared with $387 million in 2007, the association has said.
Other primary sponsors of the bill in the Assembly are Democrats Albert Coutinho of Newark, Annette Quijano of Union and Louis Greenwald of Voorhees.
An identical version is being sponsored in the state senate by Republican leader Tom Kean Jr. and Democrat Paul Sarlo of Bergen County.
The legislation is part of a multi-bill legislative package that proponents say will create jobs and boost New Jersey’s economy.MORE NEWS: Road To Reopening: Prudential Center Set To Welcome Fans Back For Devils-Islanders Game
(Copyright 2011 by The Associated Press. All Rights Reserved.)