In a week where the federal government has begun cutting arts funding, New York state has signaled its continuing support for the arts. On Friday afternoon, New York State Governor Kathy Hochul signed the fiscal year , which includes a lifeline for Broadway. The New York City Musical and Theatrical Production Tax Credit, which had been set to expire this year, will now be extended two years into 2027. The money allocated to the program will also increase from $300 million to $400 million.
The tax credit was first launched in 2021, to help the theatre industry recover in the wake of the COVID-19 pandemic shutdown, as costs associated with producing theatre have risen steeply. It allowed commercial theatre productions to receive tax credits amounting to 25% of qualified production expenditures. Producers could write off $350,000 for Off-Broadway and $3 million for Broadway productions.
Earlier this year, there were fears that the tax credit could face the chopping block, as New York lawmakers were looking at places to cut cost in the face of decreased funding from the federal government. But Broadway producers have come to depend on the tax credit to help ease the cost of creating shows. 鈥淲ithout the tax credit, there are years we could be 30% to 40% down in shows, because of the risk profiles of shows and the increasing difficulty of capitalizing them,鈥� echoed Jeff Daniel, the chief strategy officer of the Shubert Organization, said to the .
For now, producers can breathe more easily. An analysis from the said that the tax credit returned 23 cents for every dollar of taxpayer dollars spent. While that doesn't indicate a positive return to the state, the report stated, "there are, however, significant economic impacts related to the specific nature of this industry and its impact on NYS. These start with the tourism impact of Broadway, where nearly half of ticket sales are to those outside of NYC and its suburbs....Beyond ticket sales, there is a further relationship with restaurants, hotels, and related sales, and they are also not entirely captured within the model." The report then stated that overall, the credit carried "the expectation of a positive return on investment."
