Mass. Awarded $44M In Film Tax Credits In 2011

Film companies have been awarded $44 million in Massachusetts tax credits for projects shot in 2011, with nearly two-thirds of new spending generated by the productions going to out-of-state people and businesses, including many earning more than $1 million.

That's a jump from the $18 million in film tax credits awarded in 2010.

The Department of Revenue report released Wednesday credited the increase on the return of multiple major feature films being made in Massachusetts.

In 2010, nine feature films generated nearly $7 million in credits compared with 2011, when 13 feature films generated about $40 million in credits. In all, tax credits were generated by 77 productions in 2011, including movies, television shows, commercials and documentaries.

Among the movies shot in Massachusetts in 2011 were "Ted," starring Boston native Mark Wahlberg; the Sarah Jessica Parker flick "I Don't Know How She Does It;" and "R.I.P.D." a story about a slain police officer joining a team of living officers to solve his own murder.

Of the nearly $175 million in new spending attributable to the tax incentives in 2011, 35 percent was paid to residents or businesses located in Massachusetts, while 65 percent was paid to residents or businesses located outside of Massachusetts.

Of the $114 million spent on wages, about 47 percent went to individuals earning more than $1 million, while about 53 percent went to those earning less.

While overall new spending generated by the films was nearly $175 million in 2011, the amount of net new spending in Massachusetts was just under $39 million, after taking into account payments to out-of-state residents and businesses, as well as state spending reductions required to fund the tax credits in order to maintain a balanced budget.

During the calendar years 2006 through 2011, the program has resulted in nearly $186 million in net new spending in the Massachusetts economy, the report added.

Supporters of the tax credits say they lure movies and television shows that would otherwise be shot elsewhere. Those productions bring with them money and jobs.

Don Packer, President of the Massachusetts Production Coalition, said the tax credits have helped boost work at his post-production facility in Boston that now employs 18 people.

"The production incentive is not only creating jobs, it's creating an industry," Packer said in a statement.

Critics, however, portray the credits as a giveaway to a deep-pocketed industry at a time when the state is cutting back spending and Gov. Deval Patrick is pushing for tax increases to pay for improvements in transportation and education.

Patrick wants to cap the tax credits at $40 million a year.

An additional 61 projects were in pre-production, production, or postproduction and were expected to have been completed before 2012's end.

Spending from projects in calendar year 2012 is estimated to be $313 million, resulting in lost tax revenue from tax credit claims of over $78 million, according to the report.

The report didn't estimate any potential economic bump the state might have received as a result of increased tourism in Massachusetts because of the movies.

The Department of Revenue said the agency didn't know of any reliable economic model to calculate that effect.