Connecticut has issued more than $1.5 billion in film production tax credits since fiscal year 2008, with the Lamont administration saying the credits have grown at a 9.1% compound annual rate, faster than inflation and the overall state budget.
In fiscal year 2025 alone, DECD issued another $176.8 million in film-related credits, including $150.2 million in production credits.
Yet after nearly two decades and more than $1.5 billion in credits, Connecticut is still trying to put basic controls over the program in place.
State auditors made 13 recommendations concerning DECD’s administration of media tax credits in 2024. By August 2026, a follow-up report found that only four recommendations were fully implemented. Six were partially implemented, and three remained unimplemented.
One unresolved problem involves a basic safeguard: Connecticut still lacks a formal process for matching tax-credit vouchers issued by DECD with credits actually claimed through the state tax system.
The original audit found DECD and the Department of Revenue Services (DRS) were not reconciling the two. Auditors warned the gap increased the risk of errors or fraud and reduced the likelihood that inaccurate or fraudulent vouchers would be detected.
The problem remained unresolved in 2026. DECD still has no formal reconciliation agreement with DRS or written reconciliation procedure. The department says the agencies communicate and exchange data twice a year. Auditors classified the recommendation as not implemented.
The follow-up report says DECD appears to have partially or fully implemented 77% of the recommendations, although auditors cautioned that the figure is based solely on DECD’s responses and may be verified during the department’s next audit.
The original audit had a 77% figure too, and it was a lot less flattering.
In 2024, auditors found that 35 companies, or 77% of the applicants reviewed, had files missing at least one required document.
Auditors also reviewed 43 applications representing approximately $214 million in credits. Of the 43 external audit reports accompanying those applications, 35, or 81%, failed to meet at least one requirement in DECD’s own instructions.
Auditors said DECD issued vouchers without ensuring only qualified expenses were used to calculate their value, increasing the risk that excess credits could be issued.
That recommendation remains only partially implemented. DECD told auditors that formal controls specifically ensuring complete external audit reports are still not in place, although it said controls are “baked in” to its procedures and a planned online portal should help.
Another recommendation remains unimplemented after auditors found the state film office used application-fee revenue for social-media advertising, website hosting, trade-show travel, training and local film festivals. Of 57 expenditures reviewed, 50 were not clearly tied to analyzing applications, the purpose authorized by statute.
A record like that might prompt lawmakers to reconsider the subsidy.
Connecticut expanded it instead.
Buried in the 2026 budget-adjustment bill were two film-credit provisions: one extended the 92% redemption rate for two more years, 2026 and 2027 income years, while the other created a new supplemental credit for productions filming in Bridgeport, Hartford or New Haven.
This came after Gov. Ned Lamont proposed reducing the maximum existing production credit from 30% to 25% in 2025.
One filmmaker called the five-point reduction a “guillotine” for Connecticut’s media industry.
The administration estimated the cut would increase state revenue by $9.2 million in fiscal year 2026 and $17.1 million the following year.
The guillotine never fell.
Supporters argue the credits create jobs and economic activity. DECD’s latest annual report estimates every dollar in film and digital media production credits generated $5.60 in economic output in fiscal year 2025. The department also estimates the production credit generated $22.9 million in net state revenue that year.
But that estimate depends on assumptions about how many industry jobs are attributable to the credit. DECD says it does not yet have job-creation data tied directly to the tax credit and uses 50% of Connecticut’s motion-picture and broadcasting jobs in its fiscal analysis.
Other analyses have reached a very different conclusion.
A 2024 analysis by Connecticut Voices for Children, a research-based advocacy organization focused on Connecticut children and families, reviewed DECD reports and a study DECD commissioned. It calculated that Connecticut’s film-industry tax credits produced an average net state revenue loss of $62.7 million a year and nearly $894 million in total over the periods reviewed.
Using estimates from the legislature’s Office of Fiscal Analysis, the group also found that repealing the credits would increase state revenue by an estimated $105.8 million a year starting in fiscal year 2025.
Put simply, the credits may bring film spending into Connecticut, but over the periods analyzed by Connecticut Voices, the state gave up more in tax revenue than it got back.
Connecticut has had nearly two decades to decide whether this credit is worth its cost.
Instead, temporary benefits get extended, new credits get added, and safeguards remain unresolved.
The credits keep rolling. Taxpayers keep paying.
