Music Production Activists Win, Lose

Music has always been part of activism, but in recent times, there’s been a surge of activism for music—specifically music production, as various states consider whether to attract industry business with tax breaks.
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Clive Young,

Editor-In-Chief, PSN

Music has always been part of activism, but in recent times, there’s been a surge of activism for music—specifically music production.

The latest example is the Georgia Music Investment Act, which was signed into law by Governor Nathan Deal in mid-June. Expected to create 10,000 new jobs within the state’s music industry, including in the touring, recording and post sectors, the GMIA will kick off in 2018, providing a 15 percent refundable tax credit to recording and scoring projects as well as musical and theatrical live tours if they rehearse for a minimum of seven days and start in the state.

It’s a strong statement as to how the state’s government values its music industry, which reportedly generates $3.7 billion annually. The benefits aren’t just being handed out, however; a production company must meet a minimum threshold of $500,000 for live performance rehearsals, $250,000 for stand-alone scoring projects (aggregate in a year) and $100,000 (aggregate in a year) for recorded music performances to get the tax credits. On the other hand, a production can net an additional 5 percent credit if it’s held in lesser-developed Tier 1 and Tier 2 counties.

While GMIA appears to be a smart approach to attracting music-based business to the region, not everyone is for handing out tax breaks to the music industry. In my editorial for last August’s issue, I detailed a bipartisan bill in New York State, the Empire State Music Production Tax Credit, that was designed to bolster that state’s floundering music business in ways similar to Georgia’s recently passed act. According to industry group New York Is Music, the state’s share of recording sessions for top-selling albums dropped nearly 50 percent between 1999 and 2014, and Crains New York reported that the Local 802 Associated Musicians of Greater New York discovered work for its members dropped 30 percent between 2004 and 2014.

Aiming to combat those numbers, the bill would provide a 25 percent tax credit for eligible production costs for downstate music businesses and a 35 percent tax credit for them upstate. Although New York’s bill passed both the state Assembly and Senate, it was ultimately vetoed last November by Governor Andrew Cuomo.

While the veto was a setback for the bill’s advocates, some parts of New York State are still moving forward in trying to address these issues by unearthing more statistical details. In March, a new study, Economic Impact, Trends, and Opportunities: Music in New York City, was released by the Mayor’s Office of Media and Entertainment (MOME), with some notable findings. Just within in the city alone, there are nearly 60,000 music-related jobs, providing $5 Billion in wages and an economic output of $21 Billion. Concurrent with that, music-related jobs and wages are growing at a faster pace than the rest of the City’s economy (4 and 7 percent, respectively); and perhaps unsurprisingly, NYC’s economy gets far more of a boost from live music ticket sales, industry wages, and music-related digital start-ups than other cities do.

Comparing NYC’s statistics to those for all of Georgia, some will argue that the Big Apple doesn’t need economic help from tax breaks. On the other hand, decisions made today always affect tomorrow; would those breaks help capitalize on the region’s current economic success? It’s a difficult question with many answers—which likely raise even more questions. Those who are curious as to how these and other related issues play out when they move from mere theory to being acted upon, may want to look into the Music Cities Convention, a two-day international summit about the care and feeding of creative municipalities, taking place October 26-27 in Memphis, TN.