This is a story of opportunities lost. It begins in 1998, when employment levels in overall film production in New York started to slide downward between 5 and 10 percent per year.
In response, New York entertainment unions – acting through the Coalition of Motion Picture and Television Unions – lobbied to save film business and employment in the state. Also working on this team were some producers and employers.
The state of New York passed film and television tax credit legislation in 2004, providing qualifying productions with a 10 percent credit for all taxes due as way to spur economic development and retain jobs in the entertainment industry.
As a follow-up to that effort, the coalition got New York City to pass a parallel bill in the following year, creating a 5 percent credit for productions budgeted to spend 75 percent of their production costs in the city. (The city created the “Made in New York” program that same year.)
The impact has been tremendous. According to one study:
- The direct New York spending by tax credit recipients was $1.7 billion in 2007, with $816 million of that going to salaries for 7031 jobs.
- Such spending also creates indirect economic activity: the multiplier effect. That stimulus is even greater – $2.16 billion.
- The total overall measured activity for the year was $3.88 billion.
- The tax credits allotted in the period were $106 million.
- The government collected a combined $404 million in taxes in the period for a return on investment of some $298 million.
- According to the study, over the five-year life of the program, municipalities and the state have collected some $2.69 billion in taxes while the credits claimed are $690 million. Tax collections exceeded credits claimed by $2 billion.
The bottom line is that this program created and retained jobs in the film and television industries – except for musicians.
Union-covered musicians’ wages for film scoring in the four years ending in June 2008 dropped by nearly 90 percent! (When we include low budget film work, wages still show a decline of 72 percent.)
In contrast to this bleak picture, IATSE movie camera crews were working at 100 percent of capacity in 2009 versus just about 50 percent before 2004. In fact, an IATSE local reported that it is discussing reviving their apprenticeship program to be able to handle all the work!
And all the other production arts locals similarly report being very busy in film.
Here’s the million-dollar question. Why are musicians not participating in this boom?
Part of the answer is that technology has enabled running away from us, making it ever easier to use lower-cost Eastern European orchestras.
But the other part of the answer is that it is our own fault. We weren’t paying attention.
In 2004, Local 802 did not place a priority on relationships with the rest of the labor movement – other than on Broadway through COBUG. Local 802 did not participate in the Coalition of Motion Picture and Television Unions.
So a crucial moment of opportunity was lost when legislation for these tax credits was being designed and pushed by other unions.
We could have supported this on the ground floor, building the power of the union to serve musicians’ interests, but no one made the call.
One lobbyist lamented, “Why didn’t you guys call me? That’s all it would take.”
The result of this inaction is that musicians’ wages literally don’t count under the terms of the laws governing eligibility for tax credits.
Remember, these credits are funded by state and city taxes.
So, in other words, musicians pay taxes so other creative people can work!
After the City Council acted, Local 802 successfully scrambled to get film session wages added to the city’s regulations implementing the new credits, but not the law.
That’s a technical distinction, and it’s important to hash it out. Here’s what it means.
Film session wages count in the general category of “other expenses” when productions report their costs after qualifying for the credits.
In the production budget-planning process, however, neither the state nor the city paperwork, which producers must sign, mentions music.
Everything else under the sun that goes into a film is listed on the reporting forms but not musicians or music – and the law excludes composer’s fees.
So if the composer’s deal is structured as an “all-in” deal, the law excludes music from tax credits.
Composers estimate that as much as half of all contracts for movie scoring are structured this way.
For four years, nowhere in the explanatory brochures of the city and state agencies are musicians’ wages mentioned as a qualifying expense.
The result is this. Only about 37 out of 185 major motion pictures that qualified for the tax credit recorded their score, or portions of it, in New York since the program’s start in late 2004.
A late start
Following the lead of the film editors, and with COMPTU support this time, proposals were drawn in late 2007 by Local 802 for a push to create a stand-alone post production tax credit in 2008.
This proposal was slated to be part of the governor’s legislative agenda and proposed budget for 2008-2009.
But that governor resigned in a sex scandal and there was upheaval.
Ultimately, a bill to change the credit to 30 percent from 10 percent, to match Connecticut’s new credit, did pass.
Unfortunately, the post-production bill fell off the political radar screen for that legislative session.
Then the economic collapse of 2008 caused a fiscal crisis for the state and all new spending concepts went dead in the water.
The success of state and city tax credits are an example of using public money to retain jobs and stimulate private employment.
According to a study, public-private partnerships in arts and entertainment are the most efficient and effective tool for sustainable economic development.
The New York state and city film tax credit system is one example of a successful public-private partnership.
The union had the opportunity to join with others to build economic power. That missed cue cost New York area musicians millions of dollars in lost wages.
Local 802 is working to build a coalition of COMPTU unions, NARAS members, post-production houses and the New York State AFL-CIO to pass tax credit legislation for post-production work. That’s called organizing through politics.
Organizing is building power so that the interests of the members are served. If you want to help the union in this endeavor, e-mail Paul Molloy (Pmolloy@Local802afm.org) or call us at (212) 245-4802.