PIA Panel Report
Updated: Feb 5
On January 21st, 2021 the Production Initiatives Association hosted a panel discussion regarding the film industry, politics, and economic recovery.
The Production Initiatives Association (PIA), an entertainment industry business association, was founded to represent small businesses via government relations, but also to recognize our ability and the necessity of investing our energies and competencies to boost our communities for all of New York, up and downstate. Seeking success for all of New York is a short and long-term strategy to rebuild economic stability and seek collaborative solutions with elected leaders for the benefit of all.
Notably, the attendees for the panel terrifically illustrated the array of small businesses and independent professionals who we know are vital to the economy. We saw payroll companies, production companies, entertainment lawyers, producers union crew, talent agents, film commissioners, prop houses, equipment rentals, location owners, and sound stages attended. It’s inspiring to imagine the possibilities of the multitude of different businesses with varying superpowers coming together to advocate for small businesses in entertainment, but also be active participants in the betterment of our communities and stewards of the future.
Please join us to leverage your business's superpower to secure a stable film industry and vital community.
We spoke with three panelists with different professional backgrounds, but overlapping expertise and perspectives. Here are the main takeaways from each.
Assembly Member Daniel O'Donnell
In the State of the State Address, Governor Cuomo presented two budgets and is waiting on a federal aid package as a determinant for the final budget. Budget negotiations started this week and will continue until April 1st.
There is a common misconception that film incentives benefit the already wealthy upper tier of "Hollywood". The industry should be aware that local leadership has no counter-argument to this distortion if we do not bring it to their attention.
Legislators, outside the five boroughs especially, need to feel engaged and made to care that their constituents support incentivizing filmmaking legislation.
Letters or invitations to visit set to County Executives, City Council Members, State Senators, and Assembly Members could serve us well so they may witness the economic multipliers and employment opportunities media production generates.
Many states have incentives for filmmaking, but regarding the terms of the incentive, governments want to strike a balance to benefit the entire state versus the already established film centers.
The economic benefit of filmmaking is often underscored when the incentives expire or are cut. Local business associations, such as hotels, feel the effects of reduced productions and often emerge to support film incentives post facto when it could take years to reinstate.
William Lindsay III
Elected leaders understand how essential small businesses are to a viable economy particularly creating and retaining jobs in New York state. Sometimes that means incentivizing certain industries due to other states' business recruitment strategies.
Small businesses and local government must work together, but legislators need to hear from industry stakeholders to better understand and serve the sector of the economy.
William Lindsay III
What is the potential relationship between elected leaders and small businesses and is participation in collective advocacy and lobbying a form of risk management?
William Lindsay III: When you’re a legislator you are supposed to be accountable to your constituents, and with your constituents, there are many different issues that you face. But first and foremost, it goes just to our most basic needs. It has a viable economy where people are able to work and people are able to support themselves, provide for housing and food, and all the things necessary for life. And in order to do that, you have to build this viable economy. And most people know our economy is built on small businesses in order to create an environment where those small businesses can thrive and can succeed. In some cases, the government has to get involved to help and make that possible. In some instances, they have to just stay out of the way and allow the free market to do what it does for these businesses to thrive and to do well. But in this particular situation, we're talking about, it really needs government interaction.
The government needs to help support certain industries in order to keep them here. As a legislator for six years, we would see actively see other states with the presence in New York literally knocking on doors, going to business owners, saying, “Why don't you come to our state will roll out the red carpet for you will provide you with all types of tax incentives and all types of benefits”. In some cases, we'll even build you a new building. And it doesn't matter if you have 300 employees or if you have 30 employees. In some instances, I would talk to CEOs and even just owners of small businesses where the governor of a particular state would actually call them and say, “What do I need to do to get to come to Texas, to North Carolina, to Florida, New Jersey?” So you have this incredibly competitive environment that local government and the state government has to be attuned to.
“There is huge power in numbers. It creates the overwhelming sense that this is an important issue, it makes it real.”
Otherwise, if they close their eyes to it, they're gonna wake up and all the businesses, they're gonna be gone and all the jobs will be gone with it. So it's extremely important for the government and business owners to partner together to try to keep all those jobs here, because without that, without that one industry, there are so many other supporting businesses followed out the door. It's critical to create that viable local economy today for the government to do everything we can to support those business owners and ultimately the jobs that they create.
Lobbying is something PIA is focusing on. Is what we're doing really going to make a difference?
William Lindsay III: I'm sure Assembly Member O'Donnell will talk about this as well, when your constituents come to you, either through emails or face-to-face or testimony in a public hearing, you listen to that testimony and it really molds your train of thought and how you understand the one position or another.
The other side of an argument might have more people or more of a response, and that's where the attention is gonna get directed by the elected officials. So there's such a huge power in numbers, and not only does it create that overwhelming sense that this is an important issue, but it also makes it real and true-to-life. When you have people that you represent, coming to you and telling you, they're really story of how many people they employ or average salary that they pay their employees and how they're dependent upon these tax incentives in order to continue their business and to continue to thrive, that has a tremendous impact on the thought process of that elected official and how they approach a particular issue. Specifically, I think it has a tremendous impact. Without that voice, if you expect the elected officials are going to recognize the importance of this sector of our economy, you're doing a disservice not only to yourself but the entire industry, because absent our voices, they're gonna listen to somebody else and some of their opinion or just draw their own conclusion which might be contrary to our ultimate goal.
So I think it's it's critical, and it's vital that we continue to have a voice, even when successful, even to continue that open dialogue to establish that relationship. You don't want to come in in the 11th hour when they're talking about taking away that benefit, because, at that point, it might be too late. It's a risk that's far too great to allow that to happen. So it's critical that we continue to have that open dialogue, I think it's critical that we continued to develop those relationships with elected officials who ultimately have the last say and what happens here. So I think it's something that we need to continue to do. And I think it's vital not only for our businesses but for our industry as a whole.
You’re the VP of Sales and Production Incentives at Media Services that covers a multitude of states. You’ve witnessed the positive economic effects of the tax incentives and multiplier effects in the local economy. Can you give us an account of that experience?
Ryan Broussard: That it really is hard to vocalize that with people that don't know our industry or the film industry as a whole. You know, a lot of people have this obtuse, you know, perspective that, "Oh, you know, taxes in this film incentive is just giving money to a producer or Brad Pitt" or something to that nature. They don't realize that the people that are being employed on these sets or the people like in media services that we're paying daily. These were people that work in the art department, set construction, grip, electric, these are salt-of-the-earth type jobs. Not everybody is walking out of a limousine. These are hardworking people that are getting paid very good salaries to William's point, making a viable economy because that money is being put back out into the economy.
I always tell people that when you see a show come into the area, it's like dropping an economic bomb...
...because these people are getting per diems, these people are getting paid well, then they're going out and spending it at restaurants wherever they're living, the hotels or Airbnbs or whatever. It might be just using all the local vendors there. And obviously, when there is a film incentive, like in New York or those other states you mentioned, they want you to spend locally. It just works in their favor. And then they get that rebate back in New York 25%. So you know they want you to spend locally. They're pushing for that, all these states, and to your point, I see that the trend.
There's a reason that most of the states when you look at the map, have a production incentive, even California that you wouldn't think would need one, right? They have one now because they know the importance of trying to keep that industry there. Every state has particular industries they're good at, right? Why not bring another one there? Why are you relying on one industry? So it's really great to see states do that and embrace [film tax incentives].
And to be completely honest, when the state gets rid of an incentive or its sunsets or expires, I can't tell you how many of them spend the rest of the next couple of years trying to get it back, and I'm dealing with that now, with a few states trying to get it back. as we speak, just trying to get back into it. So, it's extremely important to the economy. It's extremely important to the industry and to local vendors and small businesses like those with us today because [local production spending] is not just going to what you would think, it's not just going to a prop house or something like that. These people are going to thrift stores, they're going to restaurants. Hotel associations come out the woodwork when an incentive leaves because they're like, "Oh, our hotel numbers are down". It's very interesting to see those trends of coming in and out of an incentive. But it's definitely something that when it's gone, they realize they miss it.
In March of 2020, the New York film tax incentive in percentage was reduced from 30% to 25%. Does the incentive rate truly affect the decision-making behind selecting a state to shoot their projects?
Ryan Broussard: When people have these incentives, they are trying to find a balance, right? So we've seen when states have gone too far and they've offered too much, and then we've seen when states offered too little. So there seems to be this constant balance to try to figure out the right place and where to be.
We've seen that happen with Louisiana. They were at the top of the mountain in the south. And then they changed the Louisiana film tax incentive] in 2015, and then it went to the bottom, and now they've kind of balanced it out now, with some changes they did in 2017. I think George is gonna have a balance eventually.
With New York, they added a minimum spend for independent [productions], which is a lot of our clients that we do payroll for. They added a minimum spend for that which is different; they never had that before. And then they also lowered the base credit. Now they did keep the credit if you're filming upstate, and they're really trying to incentivize, people filming outside the popular New York, the five boroughs, right? Like they want. When legislators are fighting for an incentive, like a film incentive in any state, they want to make sure they're not just fighting for New York City or for New Orleans or for Atlanta, right? They want to make sure the whole state gets represented because there's a whole board of people voting on these things.
And so when you see a tax base go down, it's not because they're saying, "Oh, we're trying to hurt the incentive or change it", they're trying to find a balance for everybody in the state.
With regards to independents, the minimum spend is a million dollars now, if you're within those five boroughs, the popular areas in New York. If you're upstate and in those other areas, the minimum spend is only 250K. So they didn't make the minimum spend astronomical. Once again, they're trying to find balance, and they're trying to find what works for everybody. If they reduced it further, I mean, it's hard to predict what would happen. I would hope that if they did reduce it further, they would balance it out with maybe some type of bonus. You know, I mentioned, you get an extra 10% if you film upstate, and that was always there, so that hasn't changed.
New Jersey, for example, they are doing some interesting stuff. There they have an extra incentive if you're utilizing diversity. So if you're meeting diversity requirements, you get an extra 2%. So, my suggestion and my hope would be that if New York, or whoever, would lower a base credit even more than it is, that there's a way to still hit that number.
If you capitalize on these bonuses that are kind of outside-the-box, whether it be diversity or shooting and economically diverse or underpaid areas, so that would be a way to balance.
Louisiana lowered their base as well, but they added [bonuses] to film outside of New Orleans, and if you use a New Orleans screenwriter, you get these extra bonuses to bring it up to where it was. So as long as there's a balance, I don't think there's a problem with lowering the base credit as long as there are ways to bring it back. That helps the economy, that helps the industry, and helps people of all backgrounds and everything to help bring this industry together.
Assembly Member Daniel O'Donnell
Kindly provide some insight regarding Governor Cuomo’s State of the State and how it relates to small business owners in the film industry?
Assembly Member O'Donnell: Like everything with the governor, there is good news and bad news. The good news is he presented two versions of what the budget might be based on what might come out of Washington. He has been waiting since last March for something to come out of Washington, so he's now using what comes out of Washington as the determinant for what the budget would look like.
As chair of the Arts Committee, I have been fighting for arts funding for the last four years. Last year we were gonna have a bumper year in helping promote and encourage art in New York, and, of course, COVID took the floor out from underneath us, and so that didn't turn out to be quite the way we wanted it. He has increased the numbers, which is good, and mostly at this stage of negotiations, which starts next week, you need to have the money on the table.
So what this role is, that you have proposals to spend the money and then you have to see how much money you are proposing to bring in. And then, as from now until April first, it gets whittled down. My job is to keep it on the table.
You have personal and professional ties to the entertainment industry. Have you encountered misconceptions about the film industry that you think we need to address?
Assembly Member O'Donnell: Yes, Ryan mentioned it and I will repeat it. Yes. My sister is Rosie O Donnell. She used to have a little TV show, and, she has done a lot of movies. My husband works in arts development; he's a fundraiser for the Metropolitan Opera, his sister is a theater director and her husband is a theater producer. There's a lot going on. I thankfully never had those desires, I went into politics instead, which creates his own set of problems. The biggest problem, I would say, within my job, is the perception that Ryan brought up, that "does Robert DeNiro really need more money?".
If you live in New York City, well, first of all, you have to deal with the inconvenience of taking all the parking spaces and the constituents calling my office and screaming. Having said all that, if you are there and you witness what that is, you understand a little better [film production] is not about importing people from "Hollywood", right? And so, it would help if all the people who came to work didn't have Jersey plates, may I say, but having said that, generally, if you see it, you might be able to understand it. So when you leave the five boroughs, people don't often see what that means. And even my closest friends in the assembly who do not have an anti-New York City bias and do not have an anti-art bias, you know, wonder, "do those rich people really need to make more money"?
And so, it's not an understanding of getting the people who are going to provide the food and all that being here... I do want to say that in COVID times, the film industry, the TV industry has provided a place for stage actors to go.
We want these things to be here, but until the end of March, everything is competing with each other. [Arts funding] is competing with education funding and keeping the hospitals open and rebuilding the roads and the infrastructure. And, you know, then there's always the pettiness that gets involved. I'm sure that William will agree with me, petty disputes get raised in politics. Somebody doesn't like somebody else, somebody you know who represents where a film studio is and they're in some sort of pissing match, about something that has nothing to do with the ultimate subject matter. They try to block it just for payback. Which I really try very hard to avoid. That's the harder part.
People come to my office certain that what they are asking for right and fair. I have to explain to them, that if you want right or fair, don't come to Albany. Because nothing about right and fair is how things get done, you need advocates who can be fierce to fight for what is important to you, and, now, as the chair of this committee, that's part of what I do.
We all know that the pandemic has put tremendous pressure on the citizens, legislators, and social service providers of New York state. How can local leaders and the entertainment industry collaborate to help our communities?
Assembly Member O'Donnell: I was reading some of what was in the governor's budget proposal in the expansion of the film credit to other counties like Saratoga and Warren, is a very good thing because A, they are beautiful places, and B, in contrast to maybe New York City, they have affordable places to stay. But it also gets the local electeds, feeling engaged in what that is. And what I would say to you is, to the extent that you have members/supporters outside the five boroughs to communicate with their state elected about how important these issues are. Because to the extent that people perceive that this is only benefiting New York City or New York City voters, people lose interest. And, you know, I led the fight for five years to pass marriage equality. I led the fight for five years to repeal 58 of the Civil Rights Law, which protected police officers. There's got to be a strategy and the strategy has to include contacting people who you might not usually think will know or care. You've got to make them know and care. That's very, very important.