Scale back Mass. film tax credit
EVERY YEAR, Massachusetts forks over tens of millions of dollars to Hollywood — all for the glory of a few hundred jobs and the occasional sighting of Taraji P. Henson relaxing at ReelHouse in East Boston while filming “Proud Mary.”
Budget analysts from the left and right agree the film tax credit is not worth the high cost. This year, the Massachusetts Senate is at least making an effort to trim an estimated $14 million to $15 million from the $80 million set aside for this state-sanctioned heist of taxpayer money.
Under current law, a company is eligible for a tax credit if half of its production costs occur in Massachusetts or if half its filming time takes place in the state. The amendment, sponsored by Senator Michael Rodrigues of Westport, and incorporated into the Senate budget, makes two adjustments. First, it requires a production company to spend 75 percent of its filming time or budget in the state to qualify for the tax credit. Then, salaries only up to $1 million qualify as an eligible production expense. Currently, if a movie star is paid $10 million, the state reimburses $2.5 million or 25 percent of that cost.
The film tax credit has been in place since 2006. Subsequent efforts to cap or eliminate it failed, even with backing from Governor Charlie Baker. It does draw directors and stars to Massachusetts and generates some local jobs. But analyses of the economic impact consistently show most of the benefits go out of state. According to one study by the Massachusetts Budget and Policy Center, cited by this page before, the film program generated about 430 jobs each year for Massachusetts residents. Those jobs paid an average of $70,000 — for which the state paid $119,000. As for new revenue, each taxpayer dollar given up generates only about 14 cents.
Other states have scrapped or curtailed their Hollywood subsidy programs. But in Massachusetts, the Teamsters and friends in the House of Representatives beat back every effort to do that. House majority leader Ron Mariano of Quincy quickly told State House News Service he is “disappointed” in the Senate budget amendment that seeks to reduce the subsidy. Defending it, Rodrigues said, “This is not a big bite. It’s a nibble.”
Meanwhile, Beacon Hill lawmakers are still trying to close a $462 million gap between actual and projected state revenue. To do that, they are considering a tax on short-term room rentals, like Airbnb; a new assessment on businesses aimed at covering sharply increasing health care costs; and other new fees. Given that pending budget drama, it’s time to cut payments to an industry that only comes here for the money Massachusetts foolishly throws at it.
- - -