Thank you, Nick Paleologus!!! The Academy Award winner is: Massachusetts!

Comments

1. ryepower12 says

   January 26, 2011 at 6:58 pm

   All “more than a billion” means to me is Massachusetts flushed $250 million down the toilet, since we paid 25% of the check — including multi-million celeb salaries. It’s outrageous is what it is.

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   p>The ultimate indignity is the fact that they don’t even have to pay Massachusetts taxes. We don’t even require studios to hire Massachusetts residents, who would get Massachusetts salaries (and thus pay Massachusetts taxes) — and the studios are exempted from paying sales taxes! Yes, YOU, the struggling worker, going week to week, has to pay sales taxes… but Sony Pictures and Warner Bros doesn’t. Outrageous.

   • hlpeary says

     January 26, 2011 at 10:20 pm

     We did not pay anything…they got a 25% discount on what they had to pay the state. But, given the allied and ancillary jobs and businesses that benefit whenever any production company comes to town, we got much more that we gave up…hotels, restaurants, caterers, set extras, union workers: carpenters, electricians, painters, teamsters, rental equipment, rental vehicles, sets…the ripples to local economy is great via JOBS and paychecks for the struggling workers you are concerned about.  Tourism also increases after a movie is released that “stars” a location.  (In Salem, visitors still come to the PEM to see where The Wedding Wars was filmed or where the TV show Who Do You Think You Are was filmed with Sarah Jessica Parker or where the Crucible was filmed…long after the production has come and gone.)

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     p>The old film bureau was a disaster run by people who did not understand the industry they were trying to bring to this state.

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     p>By the way, state government and most municipalities do not require Mass. residency to be hired for govt. job….why should they require production companies to only hire MA residents?…They hire many Mass. residents who pat Mass. taxes with those paychecks.

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     p>I think when all is added up we get more than we give up.

     • ryepower12 says

       January 27, 2011 at 12:34 am

       We did not pay anything

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       p>Um, no, that’s just false. When Tom Cruise gets paid $25-30 million to film in Massachusetts, we pay 25% of it. Thems are the facts. Here’s a post I wrote on the subject from the way back machine… illustrating how we’re even paying 25% of the cost of commercials filmed in this state. http://www.ryanstake.net/2008/…

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       p>Furthermore, I find it horrifying that you’re willing to parrot lines on the ‘ripple effects’ of this non-tax-paying industry as if it would pay off our taxpaying investments without a shred of intellectual curiosity or investigation. It’s as if you think as long as you say it, it becomes true.

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       I think when all is added up we get more than we give up.

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       p>The thing is… all evidence points to the contrary. The massachusetts budget and policy center concluded we’ll get a small pittance of our investments back from this industry. Your suggestion that “we got much more that we gave up” is completely false and ridiculous. Maybe we’ll get a third of what we spend back — it’s just not a good investment.

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       p>From the MBPC:

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       The state estimates that it will pay out approximately $63 million a year in film industry tax credits in 2008 and 2009. But could the tax credit pay for itself by increasing economic activity and associated state tax revenue? A recent report by the state Department of Revenue examined this possibility. The report estimated that the total tax revenue forgone in 2006 to 2008 would be $137.7 to $138.7 million. It then examined how much of this loss could be offset by new tax revenue. The findings, quoted below, suggest that it is unlikely that more than a small portion of the forgone revenue would be offset by new revenue. This analysis is consistent with other studies of film tax credits.

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       p>Moving on…

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       The old film bureau was a disaster run by people who did not understand the industry they were trying to bring to this state.

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       p>If by a “did not understand the industry” you mean “did not understand the way to get the industry here was to legally bribe them to film here,” you’re probably right. And maybe there’s something to that — I won’t deny forking over large quantities of cash and basically ensuring it so neither they nor anyone they hire has to pay state taxes is a great recipe to get films made in Massachusetts. It even feels good to go to the theater and see films like The Town and Social Network, both of which were at least partially filmed here (though that may have happened anyway, given the fact that they needed to film on location).

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       p>However, as a state, we have to make priorities of how we’re going to spend what little money we have to spend on investments to grow jobs. I would submit there’s plenty of other areas we could get more bang for our buck — the hundreds of millions we’re spending on this industry would have been much better spent on things like public transportation, public education or infrastructure. There’s for more jobs there, both short term (construction, town employee) and long (better infrastructure = more jobs, better/smarter workers = more companies want to start up here to take advantage of our advantages).

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       p>Believe me, I’d love to be able to throw money everywhere — whether that money was going to efficient investments or not — but our budget is a net-sum game. Money spent bribing Hollywood to film movies here is money spent that doesn’t build a train to New Bedford, that doesn’t expand the T to Lynn, that doesn’t save teachers in schools across the state and that doesn’t make it easier for our students to go to school at our public colleges — the colleges that actually keep our students in state after they graduate.

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       By the way, state government and most municipalities do not require Mass. residency to be hired for govt. job

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       p>Yes, and they provide a service for the people of our state. Comparing their jobs to film productions is apples and oranges. There’s no reason why studios can’t hire at least a certain number of Massachusetts employees to make films here. I promise you, the caterer from Massachusetts is just as capable of cooking and serving as the ones a studio could ship out from somewhere else, and the construction workers from Massachusetts know how to hammer-and-nail together a set just as well as people from somewhere else.

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       p>Look, if the politicians actually thought there was a shred of a possibility that tax credits like these would pay for themselves and be strong investments for the state, they’d offer legislation to enforce tax credit transparency. They’d ensure companies that get tax credits report the number of jobs they create with our money, and how much they spend in the local economy. Those are numbers those companies already have (they have to keep track of what they spend on the local economy… so they can write off they money they spent on sales taxes, /sigh). The leadership has no interest in transparency here because they know this is a bad deal — this is all about the special interests, all about getting local pols some positive press in their districts, and all about politicians like Senate President Murray getting Plymouth Studios built at 25% taxpayer cost.

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       p>We’re cutting billions from our budget every year, while we give well over a billion in corporate handouts in the form of non-transparent tax credits that, on the whole, don’t work. We simply can’t afford these feel-good, ‘let’s get a nice headline for the local pol in the paper,’ type corporate welfare anymore. It’s well past time we get our heads out of the sand, before the Commonwealth goes bankrupt.

       • stomv says

         January 27, 2011 at 6:36 am

         Look, if the politicians actually thought there was a shred of a possibility that tax credits like these would pay for themselves and be strong investments for the state, they’d offer legislation to enforce tax credit transparency. They’d ensure companies that get tax credits report the number of jobs they create with our money, and how much they spend in the local economy.

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         p>I’m really skeptical that the work “pays for itself.”  Even if it does, lots of industries “pay for themselves” with their ripple effects.  Why movies?  Why not something which has a net benefit for the region?  Why not something where, if the companies move, you still have the potential for entrepreneurs?  This is an industry who we have to bribe to come here, and as soon as the bribes stop the industry dries up and leaves — and all those “ripples” go away because they aren’t permanent.

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         p>It’s a race to the bottom, and lots of states are competing, dragging each other down.  All states would be better off without the credits at all.

       • chriso says

         January 27, 2011 at 6:00 pm

         I’m not well versed in taxes, but I don’t see how collecting 25% less in taxes is equivalent to paying out 25% in actual revenue. My understanding is that a tax credit exempts a production from paying a certain portion of its taxes. If Tom Cruise makes $25 million dollars working on a film in Massachusetts, is the state really kicking in a portion of that? Unless someone in the state is writing the check, how is Massachusetts paying a portion of it? If this is the case, then logic tells us that not having the production here at all would actually save millions of dollars. But since none of the money spent by the production would be spent in Massachusetts if they didn’t film here, how are we possibly saving money by discouraging them from coming here?

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         p>If one wants to argue that the beneftits of having the production here are not significant enough to warrant a tax break, fine. But you seem to be portraying tax credits as government subsidies. Talking about the state “paying out money in tax credits” seems logically inconsistent. Is it a payout or a credit?

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         p>And as one who has worked on several films in Massachusetts, I can assure you that I paid state taxes on every penny I earned, as did the many local actors, Teamsters, and production personnel who workked on the production. Or is it just out of state individuals who are exempted?

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         p> As an aside, I’m not sure how much timne you’ve spent on movie or TV sets, but if you’ve ever seen craft services feeding dozens or hundreds of people on a rotating basis, with meal time often being delayed, I’m not sure you would be so positive that a local caterer could do the job just as well. Producers are going to use companies that specialize in craft services, which will generally mean bringing in an experienced company from Los Angeles or New York.
         Again, I’m not a tax expert, so if I’m misreading the situation I am more than happy to be enlightened.

         • hesterprynne says

           January 27, 2011 at 6:09 pm

           is a Refundable Tax Credit.  A definition is here.  Yes, the state pays out money even after the taxpayer’s tax liability has been reduced to zero.    

         • ryepower12 says

           January 27, 2011 at 8:52 pm

           people find what is actually going on here so unbelievable that they choose to not believe it. There may be a ‘logic problem’ going on here, but it’s not my argument — it’s the argument the state makes to lose hundreds of millions of dollars to this industry.

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           p>As Hester replied, yes, we pay 25% of Tom Cruise’s salary. This is not a tax write off, this is a tax credit. Even if their tax liabilities in this state are zero, we pay 25% of their costs.

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           p>These are not just tax breaks, these are tax credits — free corporate welfare to come film here. If they were merely write-offs, I’d have little to no problem with it.

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           As an aside, I’m not sure how much timne you’ve spent on movie or TV sets, but if you’ve ever seen craft services feeding dozens or hundreds of people on a rotating basis, with meal time often being delayed, I’m not sure you would be so positive that a local caterer could do the job just as well.

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           p>We have plenty of good (and large-scale) caterers in Massachusetts. It may be that, to meet the demand, some of these companies would have to hire out a few more people, but that’s what all companies faced with growth would do. That’s supposed to be the point of having things like tax credits — to build sectors of the economy in the state. Paying companies to ship workers in, who don’t pay Massachusetts taxes, then to ship them back out does not grow anything for our state. It just costs us an arm and a leg. That’s not a good investment for this state to make.  

2. greg-bialecki says

   January 26, 2011 at 10:56 pm

   For those who like how many movies have been made in Massachusetts since 2007, the first person to thank would be Governor Patrick, who signed the changes to our film tax credit law in 2007 that really put us on the map as a place to make movies. Nick did a fine job, but the film tax credit law changes are what made the real difference in our success.  Don’t know anyone who would disagree with that.

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   p>For those (like Ryan) who are concerned about whether we are getting our money’s worth out of the tax credit, we will be focusing this year on how to get more local workers and more local businesses involved in the movies being made here. That is the critical next step in growing the industry here.

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   p>We think that we can produce an even better return on our investment through the film tax credit.

   • power-wheels says

     January 26, 2011 at 11:56 pm

     The MA DOR recently released a report showing that MA gave out $100 million in film tax credits in 2010, and giving out those credits produced $10 million in revenue for MA. The current “return on our investment” is a 90% loss. That’s nice that you “think” that you can get a better return going forward, since it would be almost impossible for MA to get a worse return.  

   • ryepower12 says

     January 27, 2011 at 12:57 am

     While it will probably never be my favorite tax credit, I think the ‘prestige’ would be worth it if we:

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     • get rid of the sales tax exemption — when hard-working residents of our state have to pay it, everyone should
     • when we’re making sure a majority of the jobs these films bring with them are paying Massachusetts taxes
     • when we bring back Governor Patrick’s flip-flopped promise to get some sort of ‘millionaire clause’ in there, so we’re not paying 25% of Tom Cruise’s $30 million dollar paychecks
     • and when more money is invested in projects that will at least provide some stick to the carrot for film studios to stay in Massachusetts, be they claw-back provisions or making the 25% only apply to projects attached to permanent studios that are actually in Massachusetts.

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     p>Adding in those kind of caveats will still probably mean that, at best, we break even, but even getting close to the break even point would allow some of the tertiary benefits to be worth it, like the opportunity to show off our great Commonwealth in good films made here. But, as I said, only if we’re breaking even.

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     p>Do I have much hope we can get there? As the Globe pointed out on the first of the year, those caveats are going to be come hard to come by, because we’re dealing with a notorious industry here and so many other states are right up there with us in a race to the bottom, trying to lure films in.

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     p>From the Globe:

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     At the start of 2011, where is the Plymouth Rock Studios project?

     Two of the three major players from those early days, Earl Lestz and Thom Black, have left. The third – David Kirkpatrick, the long time face of Plymouth Rock Studios – has split from the company he founded.

     The divide with Kirkpatrick came six months after the Globe unearthed his history of lawsuits, broken deals, and financial instability.

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     p>Remember when this was going to be the Hollywood of the East? I had a friend who was dying to work there when it was first being reported on, and she kept talking about it for months — she’d have carted coffee around the studio if that’s what it took. I tried to cushion her for the blow that the thing was never going to happen. I still don’t think it will, in a reduced capacity or otherwise. That means the joke’s on us — because Plymouth Rock Studios is one of the biggest vehicles that drove passage of the film tax credit in the first place.

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     We think that we can produce an even better return on our investment through the film tax credit.

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     p>It’s a nice Hollywood dream, but I’m concerned the tail is wagging the dog. Nonetheless, I appreciate your presence here and any fixes are better than no fixes at all. Please keep us updating on what’s going on and how people can get involved to make sure these tax credits are more transparent and a better investment for the taxpayer.

     • stomv says

       January 27, 2011 at 6:38 am

       Does that mean that all items purchased in connection with the filming (the producer buying stuff, so to speak) is tax free because he has a little form which means that Home Depot doesn’t tax him, or do you mean that what the movie sells (the films, the posters, the action figures) is tax free or what?

       • power-wheels says

         January 27, 2011 at 7:47 am

         It’s an exemption from sales tax for all purchases made by a film production company. The company must apply to the state and show that it will spend at least $50,000 per year in MA to be eligible.