You may have read last week that Janet Evanovich’s first Stephanie Plum novel “One for the Money” – the first in a long series of crime novels set in and around Trenton – is being made into a Hollywood film starring Katherine Heigl. It’s safe to say that throughout the series of books that our city is a major character itself, as Ms. Evanovich has continuously tried to include authentic locations, details and in some instances authentic Trenton characters in her stories.
Cool, you might say. A big Hollywood movie that’s all about Trenton, being shot here. When do they start?
Well, not so fast. As it turns out, the film will not be shot here in town, but in Pittsburgh, PA. How can this be, an icon of Trenton in popular culture, produced for the big screen… in Pittsburgh?
I can’t speak for the producers, and have no idea what drove their decision-making. But I can speculate, and I can suggest that Governor Christie’s new budget is at least partially to blame.
In the Times article, Taneshia Nash Laird, Exec Director of the Trenton Downtown Association, is quoted as explaining that the decision was based on the differences in state film incentives between NJ and PA. I can believe that, especially due to the fact that as of July 1 of this year, New Jersey is likely to have no incentive program, and Pennsylvania’s is very much still in force.
Several states in the US working to attract film and television production have devised programs to lure producers in. These include our neighbors New York, Connecticut and Pennsylvania. The most popular programs these days are film tax credits. Briefly, they usually work this way: if a film or TV series is scheduled to be produced in a state, a certain percentage of eligible (which differs according to individual state formulas) costs are calculated to come up with a number that can be used as a credit against the company’s state tax liability.
For instance, a film to be shot in NJ with a budget of $10 Million would be able to use 20% of those costs, to get a certificate from the State worth a credit of $2,000,000 against their state taxes. What if the production company doesn’t have a tax bill of $2,000,000? They can sell that certificate to a bigger corporation that does, typically at a 10% discount. In this example, the bigger corporation pays only $1,800,000 for a certificate they can use to pay $2,000,000 in their state taxes. The producers get $1,800,000 in cash to help finance their project. Pretty good deal, huh?
And the State? Well, they lose $10,000,000 (the overall amount allocated each year to the program, statewide) in direct tax revenues each year, but the expectation is that they will make it up from the additional economic activity generated by the additional film and TV production brought to the state by the incentive. That additional activity will in turn create new business and new jobs that will result in sales taxes, payroll taxes etc, that will end up offsetting the state’s initial investment. That’s the theory.
How effective these incentives are in actually bringing in that additional activity and paying for themselves? It’s a good question, and one that has varying answers in states and cities across the country. There is some evidence that the program in Pennsylvania is effective in paying for itself, and a study last year by the accounting firm Ernst & Young calculated that for every $1.00 invested by the State of New York helped create activity that earned the state and other local governments $1.90 in return.Very sweet.
I haven’t seen a study about the effectiveness of New Jersey’s program, but in 2008 I did produce a seminar for the Producers Guild on the NJ Tax Credit, and featured a panel including producers, tax advisers and the man who is now the state’s Film/TV Commissioner. The verdict of that panel was that our program, while smaller, was equally effective in attracting productions in-state, or keeping work here that would otherwise go elsewhere. Film and TV production benefits all kinds of other local businesses, from catering companies and restaurants to hotels, car rental agencies, lumber yards, clothing stores, dry cleaners, office supply stores; the list goes on.
Until this year. Although there was an effort in the Legislature last year to expand the program from $10 Million annually to $50 Million, that effort didn’t go anywhere. And this year, Governor Christie’s budget eliminates the tax credit program, entirely. Zeroes it out. Oh, there is some talk about running a study to show how effective the program has been in creating permanent jobs, with a possible restoration of the program depending on results.
But that’s a red herring. Film and TV jobs are very rarely permanent jobs. Those of us in the business tend to be freelancers. We like long-term jobs, of course! But most films are staffed just for the run of the film, several weeks or a couple of months at most. If the industry is healthy enough, then people have a good chance to go from job to job, without (hopefully!) too much time off between gigs. But, any state study looking for effectiveness as measured by permanent jobs has its results already written.
So, the Governor has canceled the film incentive program for this state, and as at least a partial result, Stephanie Plum is going to Pittsburgh. That decision is too bad for a lot of reasons. Moviegoers worldwide won’t have a chance to see what kind of town Trenton – the authentic Trenton, not the one with Three Rivers Stadium – looks like. Local merchants won’t enjoy the added business that a Hollywood movie brings in. Local film professionals will have to look for work in New York or Pennsylvania, and earn sales and payroll taxes for those states. And that’s too bad.