Legislature seeks to extend tax credits to music business
House Speaker James Amann, D-Milford, says tax credits would help keep talented young people in Connecticut.
"Young people who want to pursue careers in the music business leave here to go to New York, Los Angeles or Nashville," he said. "The music industry is changing, and all the spoils will go to the states that act boldly and anticipate trends."
Raphael Hernandez, a representative of the Recording Industry Association of America, said tax credits help the industry reduce costs and avoid cutting quality.
Karen Senich, executive director of the state's Commission on Culture and Tourism, said the 30 percent tax credit to filmmakers and video production companies that spend $50,000 or more in the state has pumped hundreds of millions of dollars into the state's economy.
Since July 2006, the tax credits are credited with bringing to the state 66 film or video productions that spent about $467 million, Senich said.
Howard Baldwin, the former Hartford Whalers hockey team owner who now makes movies, told lawmakers that producing a film is difficult, "and in the production world, everybody is talking about Connecticut."
But Robert Tannenwald, a vice president and economist at the Federal Reserve Bank of Boston, said costs and benefits of tax credits have not been adequately analyzed.
"I think you need to go a little slower," he said.
Issues such as unfavorable exchange rates, are beyond the state's control and can determine if a film will be shot in Connecticut, he said.
"Connecticut is competing in a global marketplace, so global forces affect location decisions," he said.
In addition, state officials should not count on a continuing rise in the amount of money filmmakers spend, Tannenwald.
"Eventually, it's going to level off," he said.
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