Amberpaw has a great diary on the MBTA’s budget crisis situation right now, and the stark choice we are faced with as a Commonwealth today: Do we want to be a part of the 21st Century, or have a transportation system that may as well belong in the days of the horse and buggy?
No doubt, the budget situation at the MBTA is dire, but as she makes clear in her diary, the reason isn’t because of riders or even employees or anything like that. It’s because the MBTA was saddled with about $2 billion in Big Dig Debt, debt that’s drowning the agency today.
The deficit the MBTA is faced with this year is $161 million and lots of people have been questioning where that money’s going to come from.
The solution of most politicians on Beacon Hill and the MBTA big whigs they put into power is the easy one: Screw the riders. They want a combination of massive rate hikes and draconian service cuts to be the solution, the likes of which would drive many people away from the MBTA, literally.
The combination of hikes and cuts could very well kill the MBTA as we know it, giving us a worse transportation system than we’ve had in decades.
Service cuts and rate hikes would be a tremendous mistake for the agency and the state, especially when those services aren’t where they should be today and the MBTA has become significantly more expensive than it was ten years ago.
Others have called for tax hikes to pay for the budget hole and, while I wouldn’t be opposed to that, I’m not sure how viable it is on Beacon Hill and I’m afraid the tax cuts they’d choose first would be the stupid ones, like another increase to the sales tax instead of the income or gas tax.
I think it’s time to ask our politicians to behave like grownups and decide what’s more important to them: their lobbyist friends who ask (and get) legislative goody bags to the tunes of hundreds of millions every year, or the hundreds of thousands of people who commute on the MBTA on a daily basis.
Specifically, there’s one goody bag alone that would nearly pay for the entire budget deficit facing the MBTA: the “Hollywood” Film Tax Credit, costing the state $146 million in 2011 alone.
What is the Film Tax Credit? It’s a blank check from the state to pay for 25% of the costs of any movie, commercial or TV show filmed in Massachusetts, including Tom Cruise’s $20 million salary. It’s an exemption from paying any state sales tax, like any other person or company in Massachusetts would.
Moreover, we don’t even require film studios to hire Massachusetts employees for their crew, who’d pay Massachusetts income taxes and give our young adults interested in the entertainment industry a better chance of getting their first gig.
In other words, it’s a complete and utter giveaway. It takes about $3 from the state to create $1 in economic growth — and almost none of it coming back to the state’s coffers — which means we’d probably have more economic growth by flushing money down the toilet and paying plumbers to fix it.
Beacon Hill caused this problem and it’s time for Beacon Hill to fix it. If they’re not going to raise taxes, then it’s time for them to stop giving Hollywood free money.
Was the day some 46 states offered these credits, resulting in a race to the bottom only an exploiter could love. Sanity is starting to break out, though — other states are closing down their “Tax credits”. Expect the trend to accelerate as other states learn that they’re getting soaked for the bottom line of the corporate behemoths.
Now if we could recapture the giveaways to Raytheon and the other liars, we’d be talking some serious money…
that we’d let this continue when it could pretty much be enough in and of itself to get the MBTA out of this budget “crisis” that Beacon Hill created.
There’s over a billion dollars a year spent on these kind of corporate giveaways, free-money tax credits going to big companies in the state that don’t need them.
It’s time we take a strong look at these tax credits and see which ones are really benefiting the state and create the kind of economic growth to pay themselves off…. and which ones don’t.
Any of them that don’t should be ended and that money should be spent on things we know will directly help our state and create real economic growth, like our transportation system, local budgets and public schools, including our public colleges and universities, which is one of the worst-funded public systems across the entire country.
If our money went to those things, we’d get some bang for our buck.
But let’s start with the Film Tax Credit and use that to pay for the MBTA’s shortfall. We know that’s wasted money right now, and we know exactly where it can help the most.
Last year of the $151,000,000.00 movie credit giveaway in the “Tax Expenditure Budget”, $33,000,000.00 went to middleman who hawked the unneeded tax credits sold at a discount by the film companies – including to Bank of America so it would pay less taxes. Who loses? We lose.
The way the so-called Massachusetts Film Tax Credit is set up is a perfect example of “Banks got bailed out! We got sold out!” Except, not only did those banks get bailed out on the national level, they can buy “pay no taxes” credits at a discount at the expense of the Massachusetts tax payer.
My theory? The Governor and legislators like to get their pictures taken with Tom Cruise and Meryl Streep and Matt Damon and are quite entirely willing to pay for their photo ops with our tax money.
Besides, they don’t need to use the MBTA.
And yes, the bogus deficit at the MBTA created by weighing down the T with lumps of concrete and sacks of mud (better known as Big Dig Debt)
could be extinguished by shutting down the film tax credit and using that money to pay the MBTA deficit – but guess what? There is about 20 billion (yes you read that right) in giveaways, about 1/2 the potential revenue of the state is foregone or given away in the Tax Expenditure Budget.
Like with Micheal McLaughlin’s $360,000 salary that he says entitles him to a $278,000 a year pension for life (he is 66 – if he lives 20 years that translates to $5,560,000 just for stealing the Commonwealth of Massachusetts blind in plain sight – the issue is priorities, actual auditing, and using revenue for the benefit of the taxpayer, with actual long range planning, not the trough.
I assumed that the theory was we give some incentive to film here, but that would overall make MORE money for the state, but if the state is losing money on the deal, what’s the point?
What is the point? That’s a good question.
The bill is designed in such a way that it’s basically impossible for the state to make any money, even just some money to help pay for the expenses of the tax credit.
You don’t exempt companies getting the tax credits from state sales taxes and allow them to ship jobs in here and not pay Massachusetts income taxes, if you want to make money from it… or even recuperate *some* of the expenses.
It’s a complete giveaway to the industry, and the cheerleaders of the bill know it, even if they don’t say it out loud.
If we’re not making money from it and we’re not creating Massachusetts jobs, there’s one deduction left: it’s meant to give nice headlines for politicians every time a big film comes to town. It’s always nice to be a politician and be able to go in your district and talk about a movie being made there or nearby and say, “I made that happen.” They don’t have to say, “I made that happen at the cost of the MBTA shutting down the weekend commuter rail and jacking fares by 50%.”
Let’s also not forget that this was Senate President Murray’s baby for when she wanted the “Hollywood of the East” Pilgrim Rock Studios built. Maybe the whole thing would have made more sense if we had a real studio base in Massachusetts, with the film tax credit acting as a means to build investment in the state, with the state able to slowly stop the tax credit after time… when enough companies were heavily invested here.
However, that wasn’t ever going to happen. The people who got Murray to push the whole thing basically suckered her and the state. They were little better than scam artists, having a horrible history in the industry of not being able to raise the money to pay for their projects, with countless suits against them. The way the whole thing went down was beyond predictable; it was downright humiliating for the state.
Yet the lobbyists got their goose that lays the golden egg and have plenty of politicians on their rolodex who aren’t going to give it up without a fight. I just think that if ever there’s going to be the momentum to bring some sanity back and stop this corporate giveaway, it’s now — when we really, really need that money.
The film tax credit is an embarrassment in a budget that imposes such draconian cuts on desperately needed services like public transportation.
The report is filled with the kind of convoluted now-you-see-it-now-you-don’t card play that is occasionally entertaining as street-corner Three-Card Monte and nauseating in current Massachusetts governance. I guess we’re just not supposed to read or notice it, and of course it’s far too much work for any local journalists to bother reporting.
For example, from table 6 on page 19 — how many Massachusetts full-time-equivalent positions did this program create for Massachusetts residents in 2010? Negative two. That’s right. In its own damned analysis, this document shows that jobs lost to residents from spending cuts (752) outnumbered jobs created by the program. The program was able to create twenty one jobs — for non-residents. Oh, that’s just great. Use blood-money plundered from our most vulnerable populations to create jobs for non-residents. Way to go, Governor Patrick. Way to go, Senate President Murray. Way to go, House Speaker DeLeo.
This program should be terminated immediately, and the resulting increased revenue used to relieve the MBTA from it’s portion of the Big Dig debt service.
If I were a cynic, I would say that it’s to take some taxes from all of us in return for a program that benefits only certain localities, that just happen to sit within the districts of certain powerful members of the government. If I were really cynical, I’d say the same about casino gambling.
Actually, maybe I am cynical.
what about tourism, anything on that front. I took the little ones on a duck boat last summer, growing up around the city, you kind of forget the kids don’t the exposure that I had so we do a “Boston vacation” where we stay overnight. Tourism is big business, if you get a day off during the week, I’d suggest you walk around the waterfront and see the droves of tourists that visit. Back to the duck boat, it was non-stop references to what move was film on what building or street. There is an impact, it’s not just jobs that are directly hired, what is the secondary impact. My sense is people are completely disregard the impact to their benefit.
I don’t know the numbers, but the post and comment is off the mark.
Lord knows we need more Charlestown crime movies.
from The Town, Social Network and the like is a great thing, make no mistake. We all like feeling good about ourselves and these movies being made here gives us all a reason for a little pride. However, pride is luxury.
Our tourism market is strong regardless of the movies — and without seeing hardcore evidence of a major economic boost directly related to these movies, it would be borderline criminal to condemn the MBTA when this money would save it.
The positive vibe from these films pales in comparison to the importance of the MBTA. The MBTA is one of the key reasons why Boston is an alpha class world city that serves as a major financial and research hub for the entire globe, with our global importance far exceeding our population size.
Among the biggest motivations for moving or starting up a business in a region is the talent pool and transportation infrastructure, and because of our universities and because of the MBTA, we’ve got two strong assets working in our favor.
We need the MBTA to continue to be working in our favor. Yet, what is planned for the MBTA is something that will send it to its death spiral. With transportation systems being one of the biggest components of job growth and economic success — including the livelihood of the hundreds of thousands of people who use and depend on the MBTA every day of their life — we simply can’t decide to continue to give free corporate welfare to Hollywood when our own people and livelihoods are at risk. It would be selfish in the extreme.
I would change just one thing in your reply: the MBTA is already in it’s death spiral. No future tense — this is it. It is happening, and it is happening right now.
Our choice is to pull out now, by removing the Big Dig debt burden and increasing its funding, or watch it crash and burn.
Mass 8.9 percent increase from 2009 to 2010 while the U.S. was 3.5 during that same time frame. There is a lot of money that is coming in and the perception of visiting Boston or using Boston as a convention city is impacted by advertising, movies are advertising. While I agree that 25% credit seems pretty excessive, I do think the numbers are not what they seem from the reports quoted.
If the DOR thought the movies were a primary factor in tourist-related growth, I imagine their report would read very differently.
Until then, we can only go by the figures… and, I would hope, the real-life impact these cuts and fare hikes would have on everyday lives.
Anyone who would damn the 1.39 million daily users of the MBTA, who depend on having a robust public transportation system is not only out of touch, but heartless.
Meanwhile, according to the figures, the Film Tax Credit has a net negative effect on job growth. For shame.
The point I was making (which is valid) is that the numbers are crap, they even say so in your link if you bothered to read it. Here is the quote:
Here’s the shorter version of the report and revenue of the film credit. It would be too hard to figure out tourism so we didn’t bother to include it. In other words we don’t have a clue what the revenue impact of the credit.
In order for people to make informed decisions you need the proper information. Tell the people who put the report together that I really feel for them and understand things are hard and we don’t want to do them. But if you want to make policy decisions they need to do their fucking jobs.
Too many of us have taken taxes off the table.
The budget is filled with spending that does have consequences that can and have been predicted and measured, and that brings benefits that can and have been predicted and measured. That spending is already impossible to support at current taxation levels — yet we are too undisciplined (or worse) to raise taxes.
In the resulting zero-sum budget game, programs whose benefits (like “increased tourism”) can’t be measured or predicted ought to be killed in order to continue those that can. Don’t like the necessary budget cannibalism that results?
Raise tax revenues
but we need to make informed decisions. Is that a problem? I don’t link the T with tourism in the state. Infrastructure is MORE important and has a profound impact in our economy. We should do whatever it takes, reducing services is idiotic. But what we don’t need is people picking and choosing items in the budget a la Howie Carr that they know nothing about. Don’t know how to make this any more clear than I have already. We need to make informed decisions, made up stories are not numbers. You can make the argument that it’s difficult to predict anything within the economy. So what do we do, have someone pick something they don’t like use half-assed numbers and that’s good?
I agree that our decisions need to be as informed as possible — the key being “as possible”.
It seems to me that the tourism angle you’ve been promoting is more “story” than analysis. The report offered by the state that we’ve been discussing seems to be as good as we’re likely to get, imperfect as it is. “Half-assed numbers” are better than no numbers at all, in the absence of anything better.
My own preference, and I suspect Ryan’s as well, is to raise tax revenues. That said, our esteemed public officials seem unable or unwilling to do so.
It seems to me that the direction Ryan is proposing is perfectly reasonable. If the choice is between continuing the film tax credit program and destroying public transportation, I choose to sacrifice the film tax credit and do so without reservation.
If this is a false dilemma, and another better alternative exists, then I’m all ears. In the meantime, it seems to me that we must make our decisions based with what we have in front of us.
Perhaps this dilemma could be reframed as a choice between raising taxes and killing the film tax credit — since we seem to agree that putting public transportation on a sustainable financial footing has to happen anyway, shouldn’t we start there and then ask whether the film tax credit is justified in the absence of new tax revenue?
It’s knee jerk reactions like AM talk radio. No reasoned judgments. What’s the overall picture here, what are the areas where we could cut. Instead we get this tunnel vision, without analysis. You point out that maybe just maybe there is some benefit, while the credit at face value seems high, let’s know what we are talking about before gutting the whole thing. Then he tries to discredit your opinion, again, without offering anything. It’s boneheaded. Now if you read this latest post of a petition, he says he just wants to start a conversation, that’s all. He doesn’t want to start a conversation, he wants to squash it with insults. Seems like the kid has his heart in the right place but he has the economic wisdom of a 2×4, being obnoxious doesn’t help.
Tom you are right we need to add to our revenue base, seems like we have cut enough over the past few years, painful cuts. Maybe we can trim the credit, maybe there are other that are not as painful or are not working. But you get what you pay for.
What do you think restaurants, clubs and bars in Boston — you know, the tourism industry — would prefer? Another extra couple Hollywood films, or good T service to get people to and from their businesses? How about one that’s open later than midnight?
What do you think would have a greater impact on tourism? The intangible feeling of “good vibes” from a movie… or an actual public transit system that can transport millions of people surrounding and visiting Greater Boston to spend all their money there?
Do you really think people out in the ‘burbs are going to drive into town to go out? Hell no. They take the T, almost universally so. Hell, my mother is afraid of driving in the city and won’t go any other way than the train or subway…. and the train, under one of the two current MBTA plans, would be shut down on the very days she’d consider going into town to spend money.
I drive in town. If I have something planned that I I’d be staying with friends we usually get a cab.
Going to the garden or fenway I want to take the T but it’s a hassle getting home and if you include the commuter rail then if costs the same as driving in. It’s actually more convenient getting in early for a meter around 6 and park for free and not deal with the hassle.
I would think restaurants, clubs and bars want PEOPLE to go there in droves, out of towners, whatever, anyone to fill the place and be busy. Too bad the report doesn’t give us the real impact of economic activity so we could have a real basis to make a solid decision. That’s the whole point.
BTW,
Now that’s funny.
Imagine if commuter rail reliably ran a train every 10 minutes during the day and early evening, and every 20 minutes after 10p. Imagine if commuter rail and the T were intentionally built and scheduled so that taking public transportation was more convenient and more affordable (never mind safer) than driving. Imagine if your seat on the commuter rail and MBTA was clean and comfortable. Imagine if the car was reliably heated in winter and cooled in summer. Imagine if the windows were clean and not fogged or cracked.
Boston used to be a first-world city. There is no externally-imposed reason why public transportation in the Boston area can’t compare favorably with the above fantasy. Our public transportation isn’t like that because we’ve intentionally destroyed it.
You are absolutely correct that taking the commuter rail or MBTA from the suburbs is essentially impossible today. It is already in a death-spiral from which it will not recover unless we restore its funding to sustainable levels. It will already be painfully expensive to undo the damage already done by decades of starvation.
In my view, the concept of squandering tax-payer money on film credits while our public transportation is emitting its death-rattle is preposterous and offensively irresponsible.
you are confused on the topic and issue.
You wrote, in a comment titled “Coming from a person who lives in the ‘burbs” (emphasis mine):
In short, you live in the suburbs and choose to avoid using public transportation. You choose to “not deal with the hassle”. I address the question of convenience that YOU raised. I agree with you that today’s public transportation fails to meet the threshold needed for people like you to choose it.
You have been, apparently, arguing that we should continue an expensive film tax credit program that has no data to support it’s continuation. The data that the report does include demonstrates that it harms, rather than helps, the local economy. You offer no additional data or sources of data to support your proposal.
I argue, in my response to you, that continuing the expensive film tax credit program while not funding public transportation is “preposterous and offensively irresponsible”. That is both on-topic and squarely addresses the issue we are discussing.
It appears to me that the state went to some effort to assemble “the numbers”. Before you dismiss the post and comments, at least read the report
The real and immediate damage that failing to provide a workable public transportation system is doing to all of us far outweighs, in my opinion, the illusory benefits that may (but may not) accrue from happier duck-boat passengers. My own immediate reaction is that there is far more to see from a Boston duck boat than movie references.
Thankfully, Boston is not Hollywood or LA, Charlestown or no.
I’ve had several friends tell me they refused to relocate to Boston because our public transit system sucks compared to other cities. Make no mistake. Go to Washington, DC, go to New York, even Chicago where the CTA always faces chronic budget cuts (thank God MA doesn’t have a strong tea party caucus in its state leg), is better than the MBTA. Minneapolis and San Francisco also get higher ratings. Considering we were the first in the country to have one we should really make the T the crown jewel of our city. Not just the urban core but also expanding commuter rail to touch most of our suburbs and the Cape. This would do a lot more to attract businesses and particularly the young creative types they want to hire. We need a T open later than 12:00am, one that runs more frequently, stops at more places, and covers far more ground. We need the Green line to go to Somerville and Medford and the Arborway to be restored. Believe me, most people who watched Knight and Day and other recent Boston films don’t even realize its Beantown thats the backdrop. I’ve seen it stand in for New York which shows you how preposterous this giveaway is. And unlike Chicago which does have a studio revitalizing a depressed South Side neighborhood and creating local jobs for crew and media types, Hollywood imports its own people get to film here. Even a guy with pull like Affleck couldn’t local crews for his two movies, which by the way don’t present Boston in the most favorable light. An all night and functional T would do a lot better than another crime movie or generic rom com when it comes to attracting people to our city and the Baystate in general, as tourists as as future residents.