MORRIS COUNTY — Senator Joe Pennacchio (R-26) questioned Governor Murphy’s motive to provide a multi-million dollar tax subsidy to Hollywood’s film industry while simultaneously increasing taxes that negatively impact New Jersey’s shore homeowners and the summer tourism industry.
Senator Joe Pennacchio questions Governor Murphy’s motive to provide a multi-million dollar tax subsidy to Hollywood’s film industry while simultaneously increasing taxes that negatively impact New Jersey’s shore homeowners and the summer tourism industry.
“Governor Murphy’s tax break for the Hollywood film industry stands in stark contrast to his tax hike on New Jersey shore house renters,” Pennacchio said. “While the Hollywood-connected elite will enjoy $425 million in subsidies, beach renters could pay up to an additional 14 percent in taxes. This could amount to hundreds of dollars in fees on what was once an affordable family vacation. The owners of these shore rentals are also paying an unfair price, on top of the already high taxes and operational costs required to maintain their properties.
“Why is Governor Murphy bankrolling Hollywood millionaires, while raising taxes on the little guy? This is completely unfair. If anyone should be given a tax break, it’s the hardworking families who have to scrape together extra funds just to afford a Jersey Shore rental. Governor – forget about your friends in Hollywood. The people you were elected to serve in New Jersey deserve your help first.”
Months before the recent release of the State Comptroller report, which shed light on New Jersey’s disastrous system for awarding tax breaks, Senator Pennacchio sent a letter to the New Jersey State Auditor requesting that the office examine the return on investments that are associated with the New Jersey film tax credits.
According to the non-partisan Office of Legislative Services, the New Jersey film credit could result in a net loss of $425 million to the state. OLS was also unable to quantify if and what revenue New Jersey could expect to gain from this program.
Numerous studies have questioned the effectiveness of state tax breaks on the film industry.
The number of states offering similar film tax credits has fallen from 44 to 31 in the past ten years, according to the National Conference of State Legislators.
Pennacchio added that this film tax break comes at a time when the state is raising taxes on families, business owners, corporations, and short-term shore house rentals.
New Jersey’s tourism sector is a $43 billion dollar industry, with a large portion of revenue being made in the summer months at the beach. Jersey Shore homeowners are already feeling the impact of the renters’ tax, with fewer renters signing up than previous seasons.
“There is no excuse for continuing to raise taxes on everyday people who live and work and vacation in New Jersey. It’s outrageous. They are already paying the highest taxes in the country,” Pennacchio added. “Let’s be clear: OLS has determined that the film tax credit has no guarantee of producing a return on investment, so why do it? If they really want to create jobs, Governor Murphy and his fellow Democrats should focus on creating a business-friendly climate, rather than creating programs that pick winners and losers, or handing out favors to their friends and donors in the private sector.”