A state program provides hundreds of millions of dollars in tax credits every year to producers of movies and television shows in New York. Officials say the program is responsible for the explosive growth in the TV and movie industrty in the city; critics say the program gives handouts to companies that don't need them. NY1's Michael Scotto has Part Two of our Series, "Hollywood on the Hudson."

The CBS drama "Person of Interest" spent $82 million shooting 23 episodes in New York two years ago, creating 4,800 full and part-time jobs.

In return, the state gave the producers a $20 million tax credit.

Such tax breaks, officials say, are a big reason why record numbers of movies and television shows are now produced in the city.

“When we have that tax credit in place, it's created a boom for the industry,” says Howard Zemsky, President and CEO of Empire State Development.

The tax credt program was created so New York could compete with places like Canada and Louisiana, which were luring productions with tax incentives.

New York's credit amounts to 30 percent of most production costs, excluding actor, director and producer salaries.

The program has exploded from $25 million in credits a dozen years ago, to $420 million a year today.

Economist E.J. McMahon of the Empire Center for Public Policy believes the program should be scrapped. "This is a scam,” he says.

He argues that many productions getting credits would shoot in New York without them.

Shows like Saturday Night Live, which began in New York City 41 years ago. It is hard to envision the show being produced anywhere else. Yet it got a $12 million state tax credit for its 2013-14 season, the most recent records show.

“All of the claims about economic impacts and job creation are based on the premise that we would have nothing at all without the credit, which is simply ridiculous,” says McMahon.

Even a commission formed by Governor Cuomo in 2013 suggested scaling back the program, saying it didn't appear to pay for itself, a finding state officials dispute.

Critics like McMahon say the industry's glamour and its growing political clout help to protect the credit program.

NY1 found that giant entertainment companies like Fox and CBS have donated more than $900,000 to state political campaigns and committees in seven years. Officials argue if the tax credit goes, the studios will follow.

“We have to remember that many other cities are vying for this business so should that tax credit go away, we don't want a situation where we start to lose jobs,” says Julie Menin, commissioner of the Mayor’s Office of Media and Entertainment.

Many of these jobs, they say, are only here because state taxpayers are subsidizing them.