Senator Joe Pennacchio today said New Jersey’s Film and Digital Media Tax Credit Program is an expensive failure that costs taxpayers money they cannot afford to lose.
Sen. Joe Pennacchio today said the New Jersey’s Film and Digital Media Tax Credit Program is costing state taxpayers millions of dollars without providing any long-term benefits. (Wikimedia)
“This is a huge corporate give-away that only helps the Hollywood elites who share nothing in common with working class taxpayers,” Pennacchio said. “Hollywood is lining up for free money without providing any long term benefits for our residents who struggle to make ends meet under the highest taxes in the nation.”
A recent report in The Record and northjersey.com supports Pennacchio’s view. It cites a study of film incentives in 30 states, published in September, that found they “mostly show no statistically significant effects,” according to a professor at the Price School of Public Policy, in of all places the University of Southern California, Los Angeles.
New Jersey’s incentive is “one of the worst,” Pat Garofalo, managing editor of TalkPoverty, told The Record. “You could just set the money on fire and have the same outcome.”
Pennacchio compared the costly program to the state opening a hot dog stand and offering free hot dogs.
“The line for the free hot dogs would circle the block. The state would judge the success of that taxpayer give-away by the size of the line,” Pennacchio said. “We shouldn’t assume this program is a success because Hollywood moguls are lining up to take our free money.”
Before the program became law, the Office of Legislative Services estimated it could cost the state up to $425 million over five years but said they could not determine how much revenue it could produce!
The article states how the movie industry jumps from state to state looking for free cash.
Pennacchio, a long-time opponent of Hollywood tax breaks, said there has been no thorough study of the impact and effectiveness of the relatively new film tax credit program.
“We cannot evaluate the impact without more data, but there is no sign that any permanent jobs are being created or that there is any continuing benefit for local communities or the state,” Pennacchio said. “There are so many red flag warnings with this program. Now others are noticing the same problems. To be fair to New Jersey taxpayers, it should be put on ice before we throw more good money away.”
Pennacchio called for an audit of the $425 million Garden State Film Tax Credit program in July 2018.
Last month, he commended the State Auditor’s office after the release of the annual audit plan for 2020 revealed a pending review of the Garden State Film and Digital Media Jobs Act.
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