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 unanimously approved by the Senate Budget and Appropriations Committee today.
“New Jersey needs to invest in its economic future if we’re going to remain financially competitive in the world,” said Senator Sarlo, D-Bergen, Essex and Passaic. “Due to the high cost of living and doing business in the Garden State, we’re hemorrhaging valuable business partners at an alarming rate. By attracting emerging technology to set up shop here, we can ensure New Jersey’s continued economic vitality for years to come.”
Senator Sarlo’s bill, S-2526, would provide tax credits to digital media production companies located in the State. The bill would expand New Jersey’s film production expenses credit program to provide a credit for digital media companies as well, and raises the annual cap on total tax credits from $10 million to $30 million. 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.
“Digital media production has taken off as one of the fastest growing sectors of high-tech industry,” said Senator Sarlo. “Whether it’s digital communication, animation, music or videos, production companies need highly skilled employees, and are willing to pay competitive wages. By bringing digital media producers to New Jersey, we can ensure that those high-paying jobs go to New Jersey 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 will 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.
“I understand that the Governor’s Office has expressed concern about the cost associated with this tax credit,” said Senator Sarlo. “However, we need to treat this credit like the investment it is. In a relatively short amount of time, we will be able to recoup the costs to the State through increased tax revenue, more jobs and greater economic activity reinvested in our communities throughout New Jersey.”
Senator Sarlo added that his bill has generated strong support from several key players in the digital media industry. At a news conference last month to unveil the legislation, representatives from several major companies and advocacy groups – including the American Electronics Association, the Motion Picture Association of America, NBC Universal, Cisco Systems, and the New Jersey Institute of Technology (NJIT) – were on hand to praise the measure.
“The digital media producers are excited about the prospects of this legislation, because they want to come to New Jersey to do business,” said Senator Sarlo. “Our State is already recognized for the inherent benefits of setting up shop here, including a highly-educated workforce and close proximity to two major commercial centers in New York City and Philadelphia. By offsetting the high cost of business in New Jersey with a tax credit program, we would increase the already-attractive option of relocating here for digital media companies, and guarantee job growth and a healthy