I-Team: Movie Business Booming Thanks To Controversial Tax Credit
BOSTON (CBS) - The Massachusetts movie business is booming thanks to a controversial tax credit. The Department of Revenue says the state paid out $58 million dollars in film tax subsidies in 2014, a 77 percent increase.
It has contributed to booming business for those who work in the local film and production industries. Don Packer owns Engine Room Edit in Boston. He has hired extra people because of all the work for his production company.
"I see the business blooming in a way that I have never seen and it's working out great for all of us," he said. Like others in the industry Packer points to the residual effects and money spent in Massachusetts by all of the film workers.
The $58 million dollars in tax credits marks an all-time high. Entertainment attorney Vinca Jarrett wouldn't be surprised if 2015 surpasses it.
"In 2015 we are already seeing strong numbers. We're going to do at least as well as we did in 2014 and I expect better because we're starting to see a trickle down effect with smaller productions," Jarrett said.
The top three tax credit recipients in 2014 were big budget Hollywood flicks, "The Equalizer", "Ted 2", and "American Hustle". They raked in $37 million dollars worth of Massachusetts film tax credits.
"I would hope taxpayers would ask, 'is that the best use of taxpayer dollars?'" said Sen. Jamie Eldridge, a democrat from Marlborough.
Eldridge and other critics have questioned the wisdom of giving millions to Hollywood productions. Governor Charlie Baker tried to end the tax credit this spring, but lawmakers voted to keep it.
The I-Team found many of the tax credits wind up being sold to financial institutions and insurance companies. Money also went to out of state companies and workers.
The all time high price tag of $58 million will likely fuel even more debate. Eldridge says he'll try to cap the credit in the next legislative session.
"How deep of a subsidy should Massachusetts taxpayers be paying?" he asks.
Questions certain to spark debate in 2016 as Massachusetts continues its movie making boom.
Lauren Leamanczyk can be reached at llleamanczyk@cbs.com or on Twitter @LaurenWBZ