The following appeared on Monday, February 19, 2024, in the Blank Slate Media newspaper chain and on its website, theisland360.com:

Since the turn of the century, New York has granted huge tax cuts on in-state movie and TV production—a cause favored by media companies, studio owners, producers and movie labor.

Here’s a list of the tax credit programs which are targeted at the entertainment industry and the year they were enacted:

• Empire State Film Production Tax Credit (2004)
• Empire State Film Post – Production Tax Credit (2010)
• NYS [TV]Commercial Tax Credit (2007)
• Empire State Musical and Theatrical Tax Credit (2015)
• NYC Musical and Theatrical Tax Credit (2021)

These enormously generous programs have cost taxpayers a whopping $7 billion in subsidies since 2004. In effect, taxpayers have picked up the tab for “30% of qualified production costs for movies and TV shows made in the Empire State.”

When the tax credits were first proposed in the state Legislature, advocates argued that Connecticut and Louisiana and other states had lowered taxes on movie production and were stealing business from the Empire State.  Leading Hollywood types explained that while they loved New York State, movie production is a business and they have to focus on the bottom line.

The question now is: Are taxpayers getting a return on these giveaways to the entertainment industry?

Well, the good news is Section 108, Article 8, of the New York State Tax Law requires the Department of Taxation and Finance to hire an outside expert to conduct a “comprehensive analysis of each tax credit, tax deduction, and tax incentive under New York tax law that relates to increasing economic development” to determine the effectiveness of these programs

Such a report on the entertainment industry, performed by the investment advisory firm PFM Group, was posted without any fanfare on the Finance and Tax Department website in January.

And taxpayers should be grateful that E.J. McMahon, of the Empire Center think tank in Albany, picked up on the 360-page analysis and revealed its dismal findings.

Here’s a summary of PFM’s study prepared by the Empire Center:

• The Film Production credit “does not provide a positive return to the state.”
• “It is highly likely…that much of the economic activity [attributed to the tax credit] would occur without it.”
• Television and movie production would have happened regardless of the tax breaks because of New York’s “prominence in U.S. culture.”
• The jobs subsidized by the credit are “high paying” and thus create “enduring value,” but “it is likely that the production credit will never ‘go away’ in the sense of leaving behind a stable, job growth industry absent the credit.”

“Based on objective weighing of the cost and benefits,” PFM concluded, “the film production credit is at best a break-even proposition and more likely a net cost to New York State.”

However, these failed tax breaks, E.J. McMahon warned, “are likely to be ignored by the Hochul administration and the Legislature’s Democratic super majorities. The taxpayer giveaway to Hollywood East enjoys strong support from a politically powerful, deep-pocketed constellation of producers, actors, labor unions, and real estate interests enriched by the subsidy.”

In my judgment, the government should abolish such companies’ specific economic subsidy programs and use the cash freed up to lower the cost of doing business in the state for all businesses—cut the corporate income tax, lower the cost of Workers’ Comp and reform the Wicks Law, which prohibits the government from using general contractors and thereby inflating construction costs.

The state should stop trying to guess which industries and companies will be winners and losers; it isn’t good at making those calls. The entertainment industry should make decisions on its own after the government performs its proper role of creating a business environment conducive to investment and job creation and providing the transportation and other infrastructure necessary for the state to compete.

The following appeared on Monday, February 5, 2024, in the Blank Slate Media newspaper chain and on its website, theisland360.com:

The MTA is a mess. It is plagued by incompetent management, never-ending project cost overruns, declining services and ridership, crumbling infrastructure, sweetheart union deals, and rampant fare and toll evasion.

One year ago, for example, the governor, local pols, and MTA bigwigs gave themselves high-fives at the opening of the new Grand Central Madison station.  They boasted they did a great job building that marvel of engineering.

What they failed to mention was that the plan to route LIRR commuter trains into Grand Central was approved in 2001 and was to be completed in 2009 at a cost of $4.3 billion.

But, thanks to MTA ineptness, the project was completed 13 years late and cost a staggering $13 billion.

The bungling of capital projects is not unusual for the MTA.

Take the construction of the Second Avenue subway. On the drawing board since 1929, it was finally announced in 2004 that a piece of the plan, 8.5 miles of track with 16 stations, would be completed by 2020.

Thirteen years later, after spending $4.6 billion, the MTA opened, to much hoopla, only 1.5 miles of the subway line. The construction cost more than four times as much as similar new lines in Amsterdam, Berlin, Paris, and Tokyo.

Another problem that impairs the MTA’s bottom line: fare and toll evaders.

The MTA has admitted that subway fare evasion (i.e.: people jumping over turnstiles) cost the agency $690 million in 2022. While the numbers for 2023 are not yet available, the MTA revealed that in the second quarter of 2023, 11% of commuters did not pay, and in the third quarter it jumped to 14%. The MTA expects the total 2023 figure will top $700 million.

What was the MTA solution to curtail turnstile evaders? New subway station “Fare Beater Gates”—that are not working as intended.

MTA Chairman Janno Lieber, after conceding that there are flaws in the gates installed at three stations, said, “We might, in retrospect, have chosen a different model.”

How lame is that?

Then there are the bridge and tunnel toll evaders.  Newsday has reported that “drivers hid, obstructed, or otherwise faked the recording of plates to sneak out of paying 224,000 tolls per month last year at MTA crossings.”

To offset huge cost overruns, rampant fair and toll evasion losses, the MTA’s Hail Mary pass to raise additional funds for much-needed improvements: congestion pricing.

Congestion pricing, which is scheduled to commence later this year, was not approved to help the environment. It was created to collect lots of money. The last thing the MTA wants is less traffic in Midtown Manhattan.

It is projected that the MTA will collect from drivers entering Manhattan south of 60th Street at least $1 billion annually. (A study released by Congressman Josh Gottheimer claims the take could hit $3 billion.)

A billion dollars in annual collections can pay principal and interest on about $15 billion in long-term borrowing.

And that money is sorely needed to maintain and upgrade the transit system, let alone finance boondoggles like the Second Avenue subway.

A report, released by Comptroller Tom DiNapoli on February 1, 2024, “estimates repairs needed from 2025 through 2029, the period covering the MTA’s next capital program, to be released later this year, will cost at least $43 billion, not including the expansion and new priorities to address accessibility, resiliency, and sustainability.”

The report concluded: “With the urgent need to increase ridership, boost revenue, and secure its future, the MTA cannot afford delays in upgrades and repairs that will improve the transit system.”

Wishful thinking? Considering the MTA’s dismal record, I’m not optimistic the agency has the ability to address the comptroller’s recommendations in a timely or financially responsible fashion.

Ultimately, it is the commuters who will bear the brunt of the MTA’s incompetence. They will have to pay higher tolls and fares to endure worsening services, increasing transit delays and deteriorating infrastructure.