scorecardresearch Skip to main content

Lights, camera, tax credits

The state Senate plan to put needed guardrails around film tax credit sets up a Beacon Hill Clash of the Titans.

George Clooney directs "The Tender Bar," at Aquitaine Boston, on March 10.Matthew J Lee/Globe staff

What’s more fun than knowing that a film crew is in town?

That celebs are roaming around South Station (”Don’t Look Up”) or Back Bay (”Little Women,” “Live By Night”) or Rockport (”The Proposal”). The list is long and some of it quite distinguished, like Oscar-winners “Manchester by the Sea” (2017) and “Spotlight” (2016), a film rather special to our own organization. That — let’s call it the “coolness factor” — helps explain why many in the state’s political establishment continue to be so enamored of the program that has provided a tax break to the film industry since 2006.


Proximity to glamour is certainly fun. And filmmaking does generate jobs and fill hotel rooms — no question about that. But for years the underlying question has been: Is the $56 million to $80 million that the film tax credit costs the state’s Treasury each year worth it?

This year lawmakers in the House and the Senate have come to very different conclusions — the House is all in, wanting to keep the credit in perpetuity. The more skeptical Senate is looking to extend the life of the tax credit for another four years and put some much-needed guardrails around its use.

The Senate has struck precisely the right balance here — giving the program yet more time to prove its worth.

So far, independent analyses of the credit’s effectiveness have not been kind. The tax credit, which was due to expire at the end of 2022, came up for a hard-nosed evaluation recently by the state’s Tax Expenditure Revenue Commission — a body that includes the revenue commissioner, the state treasurer and auditor, and top-ranking legislators.

The commission rated somewhere between “strongly disagree” and “somewhat disagree” on “the proposition that the benefit of the tax expenditure justified its costs.” Their numbers were persuasive. From 2006 to 2016, the program resulted in $503.2 million in net new spending in Massachusetts.


“But the cost of each new job created in the Commonwealth was $100,000,” the report noted. The Department of Revenue has similarly panned the tax credit.

The numbers notwithstanding, House Speaker Ronald Mariano remains a huge fan, telling House members during the body’s April budget debate that making the tax break permanent would send “a clear message to the film industry that we are open for long-term commitments and the economic benefits they bring to Massachusetts.”

“The level of impact and the amount of benefits the film tax credit brings to Massachusetts is immeasurable, creating local jobs and boosting overall economic impact,” he added. (Memo to Mariano: Nothing is immeasurable. That’s just what politicians say when they don’t like what the measurements say.)

Senate Ways and Means Chair Michael Rodrigues, who has been fighting since 2017 to rein in the program, had a rather different view.

“The critique of the existing film tax credit is too much of the money, the tax credits and the benefits of the tax credit, go to out-of-state individuals and out-of-state companies,” Rodrigues said in introducing the Senate version of the budget. “We want to see more of the benefit be realized by Massachusetts residents and Massachusetts companies.”

The Senate’s proposed reforms — in addition to extending the tax credit only through Jan. 1, 2027 — would require film companies to spend at least 75 percent of their filming budget or principal photography days here, up from the current 50 percent threshold. They would also cap salaries or compensation eligible for the credit at $1 million and end the transferability of tax credits.


If production companies have little in the way of permanent operations here or minimal state tax liabilities, they are currently free to offload their tax credits (typically for 90 cents on the dollar) to credit brokers who then resell them. Massachusetts is one of 12 states that offer transferable film tax credits.

“We’ve heard loud and clear from the Department of Revenue that transferable tax credits are an administrative nightmare to track,” Rodrigues said.

The proposed Senate limitations could save the state $10 million to $15 million a year, according to an analysis by the Massachusetts Taxpayers Foundation.

Both plans for the future of the film tax credit are part of each branch’s budget bills for the fiscal year that begins July 1. That means this remake of the Clash of the Beacon Hill Titans — worthy at least of a Netflix series — will go to a budget conference committee.

The Senate plan keeps Massachusetts in the increasingly competitive game of trying to attract film production while giving the state four more years to continue evaluating whether it’s worth the cost or whether there are more effective ways to support the industry here than just throwing tax credits around.


In this case, the added time to make that evaluation is a good thing.

Editorials represent the views of the Boston Globe Editorial Board. Follow us @GlobeOpinion.