Cross posted on ONE Massachusetts
As the Governor and the Legislature consider the FY 09 budget's “structural deficit”..
In a Saturday OPED in the Herald, Rep Steve D'Amico points out that our current tax policy that provides tax credits to the movie industry is costing a bundle. Worth every penny some people think!!
The movies have come to Massachusetts in a big way. It seems that every week there is another story in the news about the success of the film production tax credits enacted by the Legislature in 2007. Hundreds of good high-paying jobs! Hollywood East! There is now serious talk about building one or more movie studios here.
What the fawning press fails to mention is the cost. Movie producers are eligible for a 25 percent tax credit. Don’t confuse this with a tax break. Movie people don’t pay any sales tax – that’s one of the minor perks of doing business here. A tax credit is like an IOU from the taxpayers. For every dollar Disney or Fox spends, they get an IOU for 25 cents. When they spend $20 million on a big-name star, you shell out $5 million. That actor doesn’t spend his money here; he takes it home to California. While he is here, the studios put him up in a fancy hotel and the taxpayers pick up 25 percent of that tab too. The same deal applies to TV shows and commercials shot here.
Puts Boston on the map for a retaliation strike by Russian nukes for continued destabilization of the middle east.
Bob Tannenwald is an economist at the Fed Reserve in Boston. He has studied and written about many types of business credits and testified in front of state legislatures, sometimes as the only voice opposing film credits as the legislators fawn over the movie stars and directors who will be sitting on the next panel. He has concluded that the benefits from giving tax credits to film productions are very speculative and overall film credits are very unlikely to benefit the state providing them. Since film credits are so new this is a very difficult area to get any hard numbers. However, taking the film credit money and investing it in education, or infrastructure, or any number of other investments would bring a fairly predictable and proven return for the state. There is no reason why policy makers should take such a long shot gamble when the budget is short and the funding greatly needed in other areas. But policy makers like rubbing elbows with movie stars and they like it when they show people that a movie is being made in their neighborhood while at the same time neglecting the fact that the neighbors are the ones picking up the tab. Good for Rep D’Amico in bucking that trend.
I bet a nickel that this means a lot more Emerson graduates are going to be working as producers here, rather than in California. Wouldn’t be surprised if the college’s studios get busy as well.
then that would probably mean more employees in MA in that industry. But that doesn’t mean that MA isn’t throwing its money around without the likelihood of any return for its subsidies. Scroll down to David Brunori’s column here on pg 57-58 for his thoughts on film credits.
http://www.taxanalysts.com/www…
As I haven’t really studied this nor have a real strong opinion one way or t’other (other than a general skepticism at most big business tax credits/breaks).
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p>However, is there a less tangible, less countable good here generated from becoming a center for moviemaking?
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p>That is, is it generally good for tourism of other kinds? For one, studio tours and the like. But also, if more stuff is set in Boston, or the Boston area, does that get Boston’s “brand” out there more and as a result, make Boston more of a destination? L.A. probably for the most part gets most of its tourism from its association with movies. (Why else would anyone want to go there??) If we could capture a little of that, it might help the economy and pay back at least some (all? more than?) the tax credits.
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p>Just a thought. I’m not married to it.
… that you’re married to. đŸ˜‰
You could, if you were so inclined, chalk film credits up to the cost of marketing your region. Of course, that begs the question of how much marketing any government should be involved in, or whether it should be at all.
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p>Measuring the effects of marketing is a science I’m not particularly familiar with, but I imagine that someone has studied this, it being the lifeblood of our capitalist system.
Around subsidizing the salaries of multimillionaire movie stars? (For example, if Tom Cruise gets paid $4 million by his producers for his work here, we kick back $1 million to his producers)
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p>We could be spending that $1 million subsidizing summer jobs for kids, or cleaning up a state park, or hiring life guards for suburban public pools and beaches, or transforming disabled adults in tax paying employees.
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p>Never mind the expenses incurred by the Governor and the Legislative leaders on their Marketing trip to Hollywood last week.
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p>Guargh! (Pardon me)
I just don’t know enough about this subject to be outraged. I probably would be if I did. However, reading one blog post about it does not an expert of me make.
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p>Even so, with all this, if indeed an outrage, it’s still, to my mind, a smaller issue than some of the bigger ones, like fighting the income tax rollback or studying Gov Patrick’s ed reforms once we get the details.
I guess I'm easily outraged these days about stupide short sighted tax policy.
I wish more of my colleagues in the progressive/liberal community paid as much attention to tax policy as the corporate community does.
Steve D'Amico had a lot of good stuff in his Herald OpEd linked above, and for some more facts check out the Mass Budget and Policy Center's special report on how we're paying 25% of movie stars salaries.
And just for the record I think trying to influence tax policy is just as important as promoting good education policy, and working to defeat the income tax repeal.
Grump. (pardon me)