Proposal to end Massachusetts film tax credit provokes strong reactions

Ben Affleck during the filming of the movie “The Town” in Boston in 2009.
Ben Affleck during the filming of the movie “The Town” in Boston in 2009. John Tlumacki /The Boston Globe

Hollywood East?

More like Nowheresville.

That’s what film industry insiders and union officials warn Massachusetts will become if legislators sign off on Governor Charlie Baker’s plan to ax the state’s film tax credit program in favor of expanding tax credits for low-income workers.

“Gone,” said Sam Weisman, a longtime Massachusetts-based producer and director, of the state’s burgeoning film industry. “Not only is it gone, but the minute news hits the West Coast, anyone who was thinking about coming here in the summer is not going to come.”

It’s a bleak prospect for an industry that has seen strong growth in the decade since Massachusetts implemented the program, a controversial measure that offers productions spending more than $50,000 a 25 percent tax credit to defray costs associated with paying actors, building sets, and other production expenses. Major films ranging from “The Judge” to “American Hustle,” “Labor Day,” “Ted,” “The Town,” “The Social Network,” and “The Fighter” and such TV shows as “Wahlburgers” and “Top Chef: Boston” have all done filming in Massachusetts during that span.

“This will have a devastating effect on the film industry in Massachusetts, because the tax credit is the reason film production companies come to shoot here,” said Susan Nelson, executive director of the New England chapter of SAG-AFTRA, a union that represents actors and other media personnel. “This will deeply affect our members. Anyone who’s making a film or TV show, they’re all looking at the numbers, and if we don’t offer the credits, they will go elsewhere.”


The Massachusetts film tax credit program competes with nearly 40 such incentive programs across the country, and supporters say it’s working: The state granted tax credits to 15 feature films in 2012, up from seven in 2006, and total production spending on film, television, and commercials eligible for the tax credit was $315.8 million, up from $86.1 million in 2006, according to a state Department of Revenue report.


Supporters of the film tax credit say the governor’s plan would jeopardize thousands of good jobs in the state.

“Working families don’t need to be hurt to help working families,” Chris O’Donnell, business manager for the film crew union IATSE Local 481, said via e-mail.

Vans Stevenson, senior vice president of state government affairs for the Motion Picture Association of America, said “Massachusetts could lose up to 10,247 direct jobs,” according to MPAA research. “The Massachusetts incentive program has been around for a while now and has developed a crew base of theatrical and stage employees. That represents a payroll of $544.8 million in wages.”

Supporters say that Baker’s proposal also threatens some local businesses. “Major players from Hollywood are scheduled to visit here in the next few weeks as they decide on locations,” said Justine Griffin, spokesperson for New England Studios, a large film and TV production facility in Devens. “Even the specter of the repeal could send them elsewhere.”

Last year, the recently opened facility played host to the cast and crew of “Tumbledown,” an independent film starring Jason Sudeikis. “We wouldn’t have gone there without the tax credit,” said Margot Hand, one of the film’s producers. “It would have been a non-starter.”

But state government officials say the program, which paid an estimated $77.8 million in tax credits in 2013, often goes to pay the outsized salaries of Hollywood stars. What’s more, around two-thirds of the production spending linked to the tax credit went out of state in 2012, according to the DOR report.


“The vast majority of the credits go to taxpayers who are out of state,” said Paul McMorrow, director of policy and communications at the state’s Executive Office of Housing and Economic Development, which oversees the Massachusetts Film Office. “If we’re looking for local economic impact, those funds will be better used if you put them in the hand of local working families.”

McMorrow said the film tax credit program’s meager returns to Massachusetts don’t justify its cost to taxpayers. “The numbers are pretty stark: of the 2,000 jobs created, only 700 went to Massachusetts residents,” said McMorrow, who added that each job created cost the state $108,000. “You have an $80 million program that only creates 700 jobs. There’s got to be a better way.”

Baker’s proposed budget, released Wednesday, would phase out the state’s film tax credit program, diverting those funds to the Earned Income Tax Credit, which he hopes to increase to $1,873 for low-income families with three or more children.

“Increasing the Earned Income Tax Credit is a very good use of those funds. That’s something that directly raises the wages of 400,000 people in Massachusetts,” said Noah Berger, president of the Massachusetts Budget and Policy Center. “Paying a star’s salary isn’t a very good way of helping the Massachusetts economy.”

But supporters of the film tax credit say it also helps support thousands of ancillary businesses not directly tied to film production — everything from restaurants and dry cleaners to lumber yards and electricians.


“They pay millions for hotel rooms, they eat thousands of meals – that commerce would not exist were it not for the tax credit. Nothing would come here,” said Weisman, who added that the state’s film industry acts a driver for tourism. “It’s all part of an anti-union festival that’s going on all around the country: When in doubt, let’s go after workers that are actually making a living.”

It’s a viewpoint shared by Speaker of the House Robert DeLeo. “I’ve seen firsthand what it has meant in terms of the local economy, things that I don’t think are even looked upon when you consider the film tax credit,” said DeLeo, describing a speech he gave at the Chelsea Chamber of Commerce. “We had a genetlemen there who rents furniture. We had a florist. We had a small little delicatessen. All of which were telling me what that film tax credit meant to them. I don’t think those are considered as some of the beneficiaries.”

Many now fear that will all go away if Baker’s budget is approved.

Count among them Dennis Lehane, whose novels “Gone, Baby, Gone” and “Shutter Island” were adapted into films here since the credit was established. “All I can say is that before the tax credit there were, if memory serves, just about no movies being made” in Massachusetts, Lehane said via e-mail. “But if the guv’ wants Hollywood to go back to ‘faking’ Boston in Montreal and Toronto, I guess that’s his choice. Not one I agree with, but then I’m not a politician.”



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Robin Dawson: Creating a more thriving film industry in Boston

Joan Vennochi: Put the brakes on tax breaks

Jon Chesto of the Globe Staff contributed to this report. Malcolm Gay can be reached at malcolm.gay@globe.com. Follow him on Twitter at @malcolmgay.