Governor Kathy Hochul of New York is advocating for an increase in film tax credits to maintain competitive advantages over neighboring states like New Jersey, which has also significantly raised its incentives. Since 2017, New York has allocated over $5.5 billion in tax incentives to productions, with the goal of fostering economic growth through increased local spending and job creation. However, there is debate over the effectiveness of these incentives, with studies showing varying returns on investment, ranging from profitable to losing propositions. The competitive nature of these incentives has led to a bidding war among states, raising concerns about their long-term sustainability and impact on taxpayers. Additionally, while these incentives benefit certain areas, particularly New York City, they create disparities within the state, as upstate regions receive less of the financial benefits from film productions.

Governor Kathy Hochul has proposed increasing New York's film tax credits by $100 million, raising the total to $800 million annually, to stay competitive with states like New Jersey, which recently expanded its program to $800 million from $100 million in 2021.

Since 2017, New York households have collectively contributed over $5.5 billion in tax incentives to productions, with significant amounts going to popular TV shows and movies, such as 'Saturday Night Live' and 'The Irishman'.

While a study by Empire State Development suggests a return of $1.70 for every dollar spent in tax incentives, another study by the New York State Department of Taxation and Finance claims the return is only 31 cents, raising questions about the program's financial viability.

The competition among states to attract film productions has intensified, with some productions receiving tax credits from multiple states, exemplified by 'Severance' benefiting from both New York and New Jersey incentives.

New York's film tax credit program has sparked debate within the state, as it disproportionately benefits New York City over upstate regions, despite an additional 10 percent reimbursement offered for productions outside the city.

Some lawmakers, like Senator James Skoufis, criticize the competitive nature of these incentives, arguing that it ultimately burdens taxpayers and creates a 'race to the bottom' among states.

Despite criticism, proponents argue that the film industry's portrayal of New York as a central character in many productions enhances the state's tourism appeal, adding an intangible value that extends beyond the direct financial returns from tax incentives.