New York State has increased funding for a tax credit program aimed at supporting Broadway productions, despite criticism that the subsidies continue to benefit economically unsuccessful shows long after their closures. This year’s state budget raised the allocation for the NYC Musical and Theater Production Tax Credit from $400 million to $550 million, expanding a program originally created during the COVID-19 pandemic to aid struggling theater productions.

The tax credit program, which offers producers up to 25% back on qualified expenses—capped at $3 million per production—was initially conceived as a temporary lifeline to help landmark Broadway shows such as “The Lion King” and “Wicked” weather cancellations and low attendance during pandemic lockdowns. Since then, however, the program’s funding has steadily increased despite a rebound in Broadway attendance and revenues.

Critics argue that the expanded subsidies represent an unwarranted use of taxpayer dollars, disproportionately benefiting wealthy investors and theatrical productions that saw limited commercial success. John Kaehny, executive director of the government watchdog group Reinvent Albany, called the program “another New York taxpayer subsidy for wealthy investors that should not exist,” adding that “there’s no fiscal or economic argument for it.”

According to reports, the program has directed hundreds of millions of dollars to a mix of shows including successful long-running musicals like “Harry Potter and the Cursed Child,” “The Phantom of the Opera,” “Chicago The Musical,” “The Book of Mormon,” and “Hadestown,” as well as less successful short-run productions. Notably, shows such as “Tammy Faye” and “KPOP” received substantial state funding despite closing after brief runs. For instance, the 2024 musical “Tammy Faye” ceased performances after 29 shows but still received approximately $2.5 million in tax credits months later. Similarly, “KPOP” lasted only two weeks yet garnered nearly $2 million from the state nearly a year after closing.

Kaehny criticized the influence of theater companies and labor unions, claiming their political clout through campaign donations and organizing has resulted in continued financial support from the state.

State officials defended the tax credit as an essential tool to stabilize the theater district’s economic foundation and preserve jobs for New Yorkers involved in the production and performance sectors. Governor Kathy Hochul’s office emphasized that ongoing support helps maintain the vibrancy of Broadway, which remains a significant driver of tourism and employment in New York City.