Beacon Hill Debates Real Impact Of Film Tax Credits

Would "Shutter Island" star Leonardo di Caprio, with Boston in the background, inspire a filmmaker to set up shop in Massachusetts? That was the question Thursday on Beacon Hill as lawmakers debated film tax credits. (Paramount Pictures)

BOSTON — Film tax credits: Economic stimulus or corporate welfare?

That was the question at a Beacon Hill hearing Thursday, but its organizer clearly subscribes to the latter view.

Rep. Steven D’Amico of Seekonk, an outspoken critic of the credits, cited data and studies that indicate their cost far outweigh their touted benefits.

He pointed out that of the $113 million in credits awarded in 2008, the state only got $17.5 million in tax revenue, according to Department of Revenue figures.

And he cited studies that showed a scant return on investment for generous film tax programs in other states.

D’Amico also mocked the notion that having the state featured on the silver screen has intangible economic benefits. “When a CEO is sitting at home thinking about where to move his company, and he sees Leonardo DiCaprio putting a bullet in somebody’s head with Boston in the background — somehow that CEO is going to be inspired and moved to uproot his company and move it to Massachusetts,” he quipped.

Backers of the tax credit program say it’s spurred a surge of movie-making in the Bay State.

Joseph Maiella, president of the Massachusetts Production Coalition who also attended the forum, disputed D’Amico’s conclusions. “The purpose of tax credit program is to attract new direct spending that would not otherwise come to the state or region,” he said. “That’s what the film tax credit was designed to do, that’s what it has done, and it’s done it very well.”

Maiella cites state figures that show the tax credit program has generated more than $1 billion in spending over the past several years.

The coalition will participate in its own forum next week to make the case for keeping the tax credit program intact.

In the budget now being considered on Beacon Hill, the governor proposes capping the film tax credits at $50 million a year.

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  • Rosie Bernhard

    The notion that the film tax incentive is corporate welfare is at best uninformed and at worst ignorant on Rep. D’Amico’s part. The film incentive draws production to the state the would not be here without the incentive. An average large budget feature pumps an average of over $200,000 per day to the local budget. Thousands of high paying jobs per year are created and YES the state does make sure they get a share of that from each employee in income tax! Even people working on out of state loan out companies are now required by the production companies and register with Mass. to pay a percentage off the top! It’s realy a no brainer. No or low tax incentives= low or NO revenue to the state!Not only are film crew peronsonel put to work, tax paying hotel rooms are full, restaurants are busy, taxis are busy- etc- all employing tax paying citizens.

  • Curtis Rand

    I bet that 5 thousand unemployed persons in the movie industry collecting unemployment and getting mass helth cost’s a lot more than 17.5 million a year.
    Thank’s CSS

  • Mitchell Rappaport

    I have a real good suggestion, Mr. D’Amico. Why don’t we ask Canada how much they like the film industry working up there. Why don’t you ask them how much it impacts their local businesses, and how many jobs it creates. Time and time again if a Democrat can’t tax it – they don’t want it. This credit means jobs and more of a stimulus to our state then anything Obama and the rest of the Democrats have done.

  • Chris Conte

    As President Obama is proposing a tax break for businesses to hire the unemployed, so Governor Patrick should propose keeping the tax breaks for the film industry intact. Doing so creates jobs.
    Rich Californians come to Massachusetts and spend their money to make movies; high paying jobs are the result. Every dollar the state takes from business through taxation is one less dollar business can spend for the labor it needs to make movies.

    The Office of Economic Development in Massachusetts issued a report analyzing the 1 billion dollars in economic activity the Commonwealth experienced because of what the film industry did here in the last few years. Hollywood spending in Massachusetts means the Commonwealth sees a net increase in tax revenue, especially with its new sales tax of 6.25%. if a crew spends $100 million dollars of their own money making a movie, they give Massachusetts 6.25 million dollars in sales tax alone for the honor of filming here, and create thousands of high paying jobs for unemployed Massachusetts residents.

    The Massachusetts Department of Revenue’s report is correct regarding state revenue, but omits the heavy stimulus that Californians, spending their own money, has upon the Commonwealth — the Commonwealth does not get as much money as it wants; instead, the money goes directly to the businesses and workers who service the film industry, without forking it over to the Massachusetts Middlemen through taxation.

    The concept of FTE, or full time equivalent jobs, does not apply as all the jobs are part time, and highly compensated. No one making films, even Ben Affleck or Matt Damon, ever works full time in the film industry. Other states that have film tax breaks do not have the advantages that Massachusetts does — Hollywood wants to be here because of the scenic diversity, and highly skilled, but unemployed worker base. Last year during filming, Massachusetts was downtown Manhattan, Paris and Rome, and the Alaskan coastline. No state can match that diversity, no matter what their tax break rate. No state outside California and New York can match the talent and crew resources right here. And Hollywood wants to be here — we have the infrastructure, and we have the locations. We just need the political resolve for the Commonwealth to leave filmmakers alone to spend their own money as they see fit, without the Commonwealth taking more of it.

    Although the state may lose some of its tax revenue for its social programs, businesses will thrive, and pay more taxes to the Commonwealth as a result anyway. Film is a growth industry — and the only one that will employ thousands in the upcoming years. If the studios ever get built, the industry will be permanently established here, and the large talent and crew pool will continue to increase, guaranteeing Massachusetts residents employment year after year.

    The tax breaks do not go as far as I’d like. Governor Patrick should propose removing all taxes on all businesses if he really wanted to help the “Common” wealth and create jobs. How many new jobs could all businesses create if they didn’t have to pay the state first? The President thinks it’s a good idea; why not the Governor?

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