Governor Charlie Baker’s plan to end the state’s controversial film tax credit is facing mounting opposition in the House of Representatives, marking the Democrat-controlled Legislature’s first significant break with the Republican governor.
A vocal group of rank-and-file representatives has joined Speaker Robert A. DeLeo and majority leader Ronald Mariano in criticizing the governor’s push to end the nine-year-old credit, established to attract movie makers to Massachusetts.
Baker has proposed taking the money saved in a film tax credit phaseout and using it to help fund a doubling of the state’s earned income tax credit, which benefits hundreds of thousands of low-income workers.
“It’s designed to make it look like the working poor against movie stars,” said Representative Cory Atkins, a Concord Democrat who co-chairs the Joint Committee on Tourism, Arts and Cultural Development. She argues that local lighting technicians and hairdressers who work on movies would be the real losers if the governor got his way.
“It’s cute,” Atkins said, of Baker’s pairing of the two policies. “And when you say ‘cute’ in politics, it’s not a compliment.”
The governor, in an acknowledgment of the opposition in the House, has backed off somewhat — signaling he is open to an alternative means of funding the earned income tax credit expansion.
“If the Legislature chooses to pay for it through some other mechanism, that we’re OK with, I don’t have a problem with that,” he said, during a recent appearance on WGBH-FM radio.
But even as he retreats on the film incentives, Baker’s high-profile push for increasing the earned income tax credit has helped focus attention on that idea.
A hearing of the Joint Committee on Revenue this week saw a contentious debate on the film tax credit proposal, but near-universal support for growing the earned income tax credit, or EITC.
“As someone who’s advocated for expanding the EITC . . . I would say I have never seen more momentum in my 12 years as a legislator,” said Senator James B. Eldridge, an Acton Democrat.
The state anticipates spending $136 million on the earned income tax credit in the fiscal year that begins July 1. That figure would swell to an estimated $290 million over the next three years if the governor’s proposal passes.
A working family with three or more children would see a tax credit as high as $937 increase to $1,873 over the course of three years.
Phasing out the film incentives, which cost about $80 million per year, would not cover the full expense. And without the movie money, expanding the earned income tax credit could be even tougher.
The state is staring down a $1.8 billion budget shortfall. And the governor and House speaker have promised not to raise taxes. But lawmakers say they will try to find the money.
The debate over the film tax credit comes amid a national reconsideration of the value of movie and television breaks. North Carolina, Michigan, and New Jersey have reined in their programs in recent years.
And in the fall, Nevada shifted most of the money from its film incentives program into a package of tax breaks for electric carmaker Tesla.
The Massachusetts film tax credit covers 25 percent of production costs and salaries, with some exceptions. It also provides a sales tax exemption on many purchases.
The state’s Department of Revenue has published annual analyses raising questions about the incentives’ worth. The most recent report found that, between 2006 and 2012, the average annual state subsidy per Massachusetts film industry job was $118,873.
Former governor Deval Patrick’s attempts to cap the film tax credit floundered in the face of lobbying by the local film industry. And Baker is facing similar resistance. Unionized set dressers, grips, and drivers have flooded the Legislature with hundreds of phone calls and e-mails. And there have been personal appeals, too.
Representative Timothy J. Toomey, a Cambridge Democrat who serves on the joint revenue committee, said he was recently approached at church by two women urging him to keep the film tax credits in place — one who works as an extra in movies and the other a mother of two workers in the industry.
Toomey, who backs the incentives program, said he’s also seen on-the-ground benefits. Last year, the producers of “Black Mass,” a film about gangster James “Whitey” Bulger, paid for the privilege of turning the Polish-American Club in his district into a replica of “Triple O’s Lounge,” the South Boston dive bar where Bulger held court.
“A lot of the neighbors walked down to watch,” he said. “It creates a little excitement.”
Lawmakers say there is no organized opposition to the film tax credit to serve as a counterweight to the industry. But they note that Massachusetts think tanks across the ideological spectrum, from the left-leaning Massachusetts Budget and Policy Center to the business-backed Massachusetts Taxpayers Foundation, have been critical of the program.
The Democratic co-chairmen of the revenue committee, Representative Jay R. Kaufman of Lexington and Senator Michael J. Rodrigues of Westport, say they need to dig further into the numbers before making a recommendation on Baker’s proposal.
But both have suggested they are skeptical of the film tax credit’s value and supportive of an earned income tax credit expansion. And that view, lawmakers say, appears to have traction in the generally liberal state Senate.
Legislators say they could do something short of a repeal of the film tax credits — tightening incentives rules, for instance, to direct more of the benefits to in-state workers and less to Hollywood talent.
But Representative Tackey Chan, a Quincy Democrat and active member of the Screen Actors Guild-American Federation of Television and Radio Artists who worked as an extra in “The Pink Panther 2,” said mainstream House members want to keep the fundamentals of the film incentives in place.
“The far left and the far right don’t like it,” he said. “The rest of us middle people — I’m a moderate kind of guy — like it.”