TRENTON – A bill sponsored by Senator Paul A. Sarlo which would offer tax credit incentives to digital media production companies to relocate to New Jersey was approved by the Senate today by a vote of 21-16, conforming to the Governor’s conditional veto of the bill.
“With this bill, New Jersey would be setting the groundwork to capitalize on one of the fastest growing industries in the world right now,” said Senator Sarlo, D-Bergen, Essex and Passaic. “Digital media production is emerging as a leader in high-tech economics, touching on nearly every area of entertainment and creating so many well-paying jobs where the companies have set up shop. This bill would give the Garden State the incentives needed to be a part of this fast-growing business trend.”
Senator Sarlo’s bill, S-2526, would provide tax credits to digital media production companies relocating in the State. The bill would amend New Jersey’s film production expenses credit program to provide a credit for digital media companies as well. The measure is patterned after the State’s successful film production credit program, which has served as a valuable incentive for film producers to shoot in the Garden State, and is designed to draw in high-tech, high-growth digital media business to New Jersey
“New Jersey’s film production credit has shown to be an extremely popular incentive to drawing motion pictures to film in the State,” said Senator Sarlo. “However, the benefits of these incentive programs go far beyond simple bragging rights, creating jobs and economic opportunities for the State’s residents. This measure represents an investment in the economic future of the State, and will mean real fiscal results for New Jersey’s residents.”
Senator Sarlo pointed to a study by global business analysts Ernst and Young, who project that S-2526 in the first five years after becoming law would generate:
• More than 4,350 new high-wage jobs;
• In excess of $311 million in new wages for New Jersey residents;
• Almost $1 billion dollars of total economic output by businesses relocating and expanding in New Jersey.
Senator Sarlo’s bill would also generate tax revenues for New Jersey and local governments that will exceed the amount of credits issued in year five, for example, by almost sixteen million dollars.
“The data suggests that a digital media tax credit would provide a big bang for our buck, and mean new jobs and new economic opportunities for New Jersey’s citizens,” said Senator Sarlo. “Given enough time, I do believe that this program will generate more money for local economies than it costs to administer and would ensure good jobs for State residents. Digital media tax credits are a wise investment in our State’s business climate, and would position New Jersey to be a leader in media production in the nation, if not the world.”
Senator Sarlo noted that the Governor’s recommendations for the bill include scaling back the amount dedicated for tax credits from $30 million in the original bill to $15 million, and placing more stringent job creation and production expenses standards on companies seeking to qualify. He added that, while he would have wanted to see a broader version of the digital media incentive adopted into law, he recognizes the need to move forward cautiously.
“Given the current fiscal projections for next year, I can understand the Governor’s objections to jumping in with both feet concerning this program,” said Senator Sarlo. “I believe that, when policymakers see the difference that the digital media tax incentive will have on business growth in New Jersey, there will be strong support to expand the program. But at this point, while we’re trying to make sense of New Jersey’s budgetary problems, I’m glad we can give this business-growth measure a chance.”
The bill now heads to the Assembly for consideration of the Governor’s recommendations.