Lawmakers Hear Pros, Cons Of Continuing Film Tax Credit
BOSTON (AP) — Supporters of the state's film tax credit packed a Statehouse hearing Tuesday to argue against Gov. Charlie Baker's proposal to do away with the decade-old tax break for movie and TV production in Massachusetts.
Baker wants to use the money that would be saved to double the state's earned income tax credit for low-income families. Administration officials said the film credit has had an overall "negative impact" on the state's economy, an assertion that was strongly disputed by production companies, labor leaders and small-business owners who appeared before the Legislature's Revenue Committee.
Citing a recent report from the state Department of Revenue, Secretary of Economic Affairs Jay Ash said for each dollar in tax incentives for the film industry from 2006 to 2012, the state received 13 cents in offsetting revenue.
"We propose to shift those funds that are supporting the film industry, supporting Hollywood moguls who take the money out of state, and instead invest that in the hardworking families of the Commonwealth," Ash said.
State officials claimed that roughly two-thirds of spending on film production over the six-year period flowed to out-of-state businesses or individuals, including many people who earn more than $1 million per year. And although the film credit was estimated to have created some 3,000 jobs over that period, the cost to taxpayers of creating each job was nearly twice the average wage that was earned, they said.
The tax incentive includes a 25 percent production credit, a 25 percent payroll credit and a sales tax exemption.
Among feature films shot in Massachusetts in recent years are "Ted," starring Boston native Mark Wahlberg, and "Labor Day," starring Kate Winslet and Josh Brolin. But tax credits also flow regularly to producers of TV shows, documentaries and commercials.
The proposal to double the Massachusetts earned income tax credit from 15 percent to 30 percent of the federal credit has been widely embraced by lawmakers from both parties and could well become law regardless of the fate of the film tax credit — which for the moment appears to maintain some powerful backing in the Legislature.
House Majority Leader Ronald Mariano, a Quincy Democrat who called the Revenue Department report flawed, recounted a visit to the set of "The Finest Hours," a film about a Coast Guard rescue off Cape Cod that is slated for release this year.
"I didn't meet any movie stars. I'm not impressed with movie stars," said Mariano, who noted he did meet members of the Teamsters union, electricians, caterers and other workers who were benefiting from the production.
Baker has suggested that the existence of tax credits is not central to decisions on whether to make films in Massachusetts, a point disputed by officials of New England Studios, a $35 million film studio complex recently built in Devens.
"It is clear from our discussions that tax credits are always a major factor when they budget and decide where to locate their film projects," said Chris Byers, the company's director of operations and marketing, in prepared testimony before the panel.
Massachusetts isn't the only state weighing the future of film incentives.
A report presented to Maryland lawmakers last year recommended ending that state's tax credit as scheduled in 2016. The issue brought actor Kevin Spacey to the state to meet with lawmakers and to help steer state aid to keep the show "House of Cards" filming there.
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