New Yorkers will soon be rubbing shoulders with the likes of Martin Scorsese and Robin Williams, thanks to the “Made in New York” tax credit program that has picked up speed barely within two months of effect. Any film or television production that films more than 75% of its production in Gotham and/or costs more than $3 million to make receives a 5% credit, whereas any production that occurs in a New York stage facility will get a 10% tax credit from the state. The program is expected to credit at least 10% of production costs which include expenses toward technical and crew production, facilities, background talent, wardrobe, and sets. Mayor Bloomberg hopes this will put a leash on the “runaway” production trend that has threatened the American economy since the past few years.

But is that going to be enough to reimburse a city that has been losing its production revenue to other countries, notable Canada since 1998? The city not only lost billions in expenses and tax revenues, it also lost more than 10,000 jobs. Not to mention the loss to hotels and local merchants. Although New York has been a major hub for filming of television shows and dozens of movies over the years, tax-subsidy programs and a lower exchange rate from across the northern border have lured many filmmakers, and continue to do so.

While New York City saw the filming of Spiderman movies, they may not catch the other super hero in action. Warner Brothers’s plan to shoot Superman in Australia to gain millions of dollars in tax subsidies has met opposition, but with no results. Having already made about $13 million in tax credits by filming majority of Catwoman in Canada, the studio intends to pocket more. And they cannot be blamed. A production that shoots in Canada versus the U.S. saves an average of 10% to 15% of the overall budget. While the producer saves about $4 million on a $30 million movie, the American economy loses about $93 million and more than 1,000 jobs. While Canadian territories keep increasing their subsidy margins by 70% to 90%, other countries in Eastern Europe, plus New Zealand and Britain are also whetting the industry’s appetite with great deals.

The American film industry has not been sleeping through all this, and certain states already have a tax credit system in place. Louisiana’s tax program, in effect since 2002, saw the production of Taylor Hackford’s $40 million movie, Ray. In Illinois, if a production spends $4 million on wages in the state, it will get a $1 million tax credit. Of the many programs offered in New Mexico since 2002, the 15% tax rebate, a check signed by the state could have been the force behind 21 Grams. And legislation in Hawaii, Utah, and Texas is getting some final touches.

But it is very surprising that a Hollywood man like Gov. Arnold Schwarzenegger has yet to step up and announce similar measures in California. Also the fact it was 2005 by the time New York woke up to announce its own measures, is rather disheartening. The film industry’s battle to convince the non-film industries in these states continues. Rather strange, given that these places are the backbone of the show business.

Ms. Parikh, a former Miss India, lives in Los Angeles. E-mail: shivangi.parikh@gmail.com