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Tax breaks cost New York $1.2 billion in financial year 2017, half went to film industry

NEW YORK (Reuters) - New York state lost $1.2 billion of revenues from corporate tax breaks in fiscal 2017, with at least half of the total going to the film industry, a Washington watchdog group said on Wednesday.

FILE PHOTO - U.S. film director Steven Spielberg (C ) works on the set of a film outside the New York State Supreme Courthouse in New York September 8, 2014. REUTERS/Brendan McDermid

The state included the information in a July financial statement, but the report was not widely known until the group Good Jobs First spotted it.

Hundreds of cities, counties and other local governments across the country have already reported similar information under a new mandated accounting rule now in effect.

However, no state has so far revealed its abatement information under the Governmental Accounting Standards Board’s mandate -- until now.

“It’s important for state taxpayers and residents to be able to see accounting in one place and make their own judgments about whether those investments have been worth it,” said Good Jobs First researcher Scott Klinger.

New York had already been publishing some information about its tax breaks, but other states are less forthcoming. In November, New York City became the first of any U.S. state or local government to report under the rule.

By next spring, some 50,000 state and local governments are expected to issue their reports for corporate tax abatements, said Klinger, who is developing a database of the information.

New York State Comptroller Thomas DiNapoli’s office, which prepared the July financial report containing the abatement details, did not have any immediate comment.

Through March 31, the end of the state fiscal year, New York provided more than $1.2 billion of abatements to companies that promised to clean up polluted sites, create or retain jobs in economically depressed areas including upstate, develop low-income housing and employ at-risk youth in cities.

Of the total, $621 million in personal income and corporate franchise tax abatements went to the film industry for movies and television series that were mostly shot in New York or used a state company for post-production work.

Since 2011, the state’s film production tax credit program has generated $17.3 billion of spending and more than 1 million new hires, according to Empire State Development (ESD), which runs the program.

Governor Andrew Cuomo has repeatedly extended the program, which now runs through 2022.

In 2016 alone, some 66 television series spent nearly $2 billion in the state altogether, ESD said.

Reporting by Hilary Russ; Editing by Sandra Maler