Compromise Reached, July 7, 2021
I intend to support the compromise resolution of the controversy about the film tax credit. It is time to put this issue to rest.
The elements of the compromise are:
- Elimination of the sunset — making the credit permanent, while preserving its transferability.
- Increasing the Massachusetts required share of production expenses from 50% to 75%.
To understand the second element of the compromise, it is necessary to get into the weeds: The film tax credit has two main parts. The 25% credit for Massachusetts payroll and the 25% credit for Massachusetts production expenses. Payroll is a subset of production expenses. Of course, one cannot get double credit for payroll expenses, but payroll expenses that are not eligible for the payroll credit may still be eligible for the production expense credit.
The compromise tightens the eligibility rule for the credit for production expenses by changing the required Massachusetts share of expenses from 50 to 75%. This 75% rule does not apply to the credit for payroll in Massachusetts.
The payroll credit is currently not available for people paid over $1,000,000, but the payroll of these “stars” can be eligible for the production expense credit. This does not change, but the star payroll credit is now limited in its availability to those films that are 75% made in Massachusetts, as opposed to 50%.
Over the past 90 days, more constituents have contacted me about the film tax credit than about any other issue. The credit will sunset in January 2023 if we do not vote to extend it or make it permanent. Some kind of change is likely to be made as part of the state budget bill that is currently under debate.
Since arriving in the legislature in 2007, I have opposed the credit, while all constituents contacting me about it have urged me to support it. It is time to offer an updated explanation of my views on the issue.
The film tax credit is a form of extortion by the U.S. film industry. Because most films can be shot or edited in more than one location, the film industry can play locations off against each other, taking their work to the state offering the best incentives and threatening to leave the minute another state makes a better offer.
Instead of simply choosing the best and most cost-effective locations, the industry has invested heavily in lobbying, seeking to extract concessions from state governments at the expense of taxpayers who have little awareness of the intense persuasion campaign underway and little opportunity to offer a contrary view.
Massachusetts adopted its film tax credit in 2006 during a period when many states were competing with each other in a lobbyist-fueled frenzy to attract film business. The high water mark of the film tax credit was 2009 when 44 states offered film tax incentives. Since then, many other states have backed away and by 2018 only 31 still offered film incentives, according to the National Conference of State Legislatures.
Constituents who contact me generally work in an occupation that supports film production. They report, and I do not doubt, that their jobs depend on the film tax credit. Roughly 80% of the credits go to feature films, many of which could and would be shot elsewhere if Massachusetts did not offer a generous credit.
It is worth understanding just how generous the film tax credit is. The credit is computed as 25 per cent of amounts spent in Massachusetts. So, if a film brings in a movie star and pays them $1 million for their time shooting on location in Massachusetts, then Massachusetts effectively pays $250,000 for the movie star’s salary. The “credit” is often much greater than the production company’s tax liability and it may be sold to another taxpayer or redeemed for cash.
This level of credit is just not fair to other industries. Many other industries receive tax incentives, but none of the various incentives is as generous as the film tax credit. If Massachusetts were willing to pay 25% of the costs of any other particular industry, Massachusetts could likely become the world leader for that industry.
But the state could not possibly afford to do that for other industries. The film tax credit, which serves a high visibility but relatively small industry, cost over $600 million in its first 10 years of existence (from 2006 to 2015) and could be up to $1 billion by now. It is a very substantial investment.
The industry often points out that their spending creates jobs and supports local businesses. When the industry brings in a crew they patronize local restaurants, for example. But the majority of the benefits of the spending goes to out of state residents just passing through to produce a film.
Estimation of the full economic impact of a feature film requires econometric modeling, which always requires some guesswork, even when done by the finest professionals. While the modeling is imperfect, the studies we can find (see resources below) indicate that the net taxpayer cost per full time equivalent job created for Massachusetts residents is very high, likely over $100,000 per year. Not that people are getting paid that much. That $100,000 number is the net tax expenditure divided by the number of full-time equivalent jobs created. Many of those jobs pay much less.
Understanding net state cost per job
The Department of Revenue (based on the 2015 DOR link below) computes the net state cost per job created as follows. The numbers in parentheses are averages for the period 2006 through 2015. The net state cost is the total credits paid (approximately $60 million per year) offset by new tax revenue generated by the film production spending (approximately $9 million per year), including taxes on spinoff/multiplier activities. The count of jobs created consists of all direct jobs created by film production for Massachusetts residents (variable, approximately 500 full time equivalents per year) plus spinoff/multiplier jobs created by film production and minus spinoff/multiplier jobs which would be created by the average state spending program which might have been undertaken if we were not reducing revenue through the credit. The spinoff/multiplier jobs for film production are roughly 600 full time equivalents per year and are slightly more than offset by the loss of spinoff/multiplier jobs by other state spending. Dividing the net state cost of approximately $51 million per year by the net job creation of approximately 500 full time equivalents, one gets approximately $100,000 per job. This is the right number to use compare to other state spending options. Indirect/spinoff jobs are computed using a dynamic model of the Massachusetts economy developed by Regional Economic Models Incorporated.
With net expenditure per job that high, there are many more direct ways to create jobs, jobs which might be more equitably distributed and which might provide more direct benefits to Massachusetts residents. If we just want to attract business, we would do better to consider broad-based incentives that apply to the full range of businesses considering location decisions in Massachusetts.
Overall, the appeal of the film industry to legislators is great enough that notwithstanding objections like mine, many support the credit. Over the next few weeks some form of compromise is likely to emerge.
Resources on Impact in Massachusetts
Resources and summary bullets assembled by Alicia Brisson.
Department of Revenue Overview of Film Tax Credit in Massachusetts.
Department of Revenue Report on Impact of Film Tax Credit through Calendar Year 2015:
- Calendar year 2015 had $272.5M in tax credits claimed, with DOR estimating that $9.6M in spending would have occurred without the film credits. Of the remaining $262.9M, $112.3M (43%) went to MA residents/businesses, while $150.5M (57%) went to out of state residents/businesses.
- From 2006 to 2015, one net new MA-resident job was created per every $102,888 spent in film tax incentives, and one non-MA-resident job was created for every $65,404 spent in film tax incentives.
- Of the $619.3M in film credits from 2006-2015, $531.4M were sold directly to other MA taxpayers or to tax credit brokers. Film producers received $467.8M in sales, while $10.1M was gross profit of tax credit brokers and an additional $52.5M benefits other MA taxpayers in the form of reduced net tax payments to MA
Department of Revenue Report on Impact of Film Tax Credit through Calendar Year 2016:
- For calendar year 2016, tax credit spending totaled $182.6M, with DOR estimating that $11.1M in spending would have occurred even without film tax credits
- Of $171.5M of new 2016 spending attributable to tax incentives, $83.4M (49%) paid to MA residents/businesses, while $88.1M (51%) paid to non-residents or businesses located outside of MA
- From 2006-2016, one net new MA-resident job was created for every $102,370 spent in film tax incentives
Pioneer Institute: For FY19, film tax credit cost state $80M in lost revenue. MA film tax credit does not effectively attract businesses to MA, create lasting employment, or simulate the economy.
Tax Foundation: 2014 study found that from 2006 to 2012, Commonwealth offered $411M in film tax credits, which only created 3,000 jobs to state residents at cost of $109,000/job, most of which were temporary, lasting less than 3 months. In 2012, MA gave $78.9M in tax credits, which cost the state $100.6M and only generated $10.6M in new state revenue, meaning that the state lost $68.3M in revenue.
MassBudget: 2015 study found that film tax credit cost MA $80M for both FY15 and FY16. For every dollar of tax revenue given away by film tax credit, the credit only delivers 13 cents of new revenue for the Commonwealth. Almost 2/3 of the film tax credit net wages went to non-residents ($394M) than residents ($213M) from 2006 to 2012.
Mass Taxpayers Foundation: 2015 Testimony offered by Eileen McAnneny, the president of the Massachusetts Taxpayers Foundation, favored eliminated the MA film tax credit due to its high cost per job created, and instead advocating that this state money be spent on EITC.
Tax Expenditure Review Commission: The Massachusetts Tax Expenditure Review Commission reviews each tax expenditure every 5 years to evaluate its purpose, intent, goal, and effectiveness. Its 2021 report found that (pg 86-87):
- “The TERC somewhat agrees that this credit provides a meaningful incentive as it returns 25% of the filer’s spending, whether that is $25,000 on $100,000 for a commercial or $25 million on $100 million in spending for a feature film. We somewhat disagree that it benefits smaller businesses or is relevant today. We also somewhat disagree that it is claimed by its intended beneficiaries, as nearly 90% of the credits are transferred. We strongly disagree that it benefits lower income taxpayers or that it is claimed by a broad group of filers. We are between “somewhat” and “strongly” disagreeing that it justifies its fiscal cost. The TERC notes that, by its nature, this credit produces immediate and measurable spending within the Massachusetts economy. This can be contrasted with, for example, an investment credit. Unlike the film credit, an investment credit would have little immediate impact; however, where an investment credit contributes to long-term capital formation, the Film credit has had no discernable impact beyond its one-time spending. Further, much of the initial spending that qualifies for the Film credit occurs outside of Massachusetts, providing no benefit at all. The result is that, while the film credit provides some immediate stimulus, it does not contribute to the long run growth of the state’s economy. Even though we are able to measure in detail all of the economic benefits of this credit, it still results in a cost of $100,000 per job created. We conclude that this is not the best use of the state’s money”.
Resources for State Film Tax Credit Impact Broadly
Chart of film tax incentive (or lack thereof) in each state.
NSCL Report found that fewer states offer film tax incentives or have tightened restrictions on film tax incentives than in 2009.
- In 2009, 44 states offered some form of film tax incentive, but that number has dropped to 31 states in 2018, with other states tightening these tax incentives
- Wyoming and West Virginia eliminated their tax credits in 2018
- Colorado, Maryland, and Texas reduced annual appropriations available in film tax credit for FY18; Oklahoma decreased annual program cap from $5M to $4M; Louisiana also introduced program cap at $150M
Atlanta Journal Constitution: 2020 study found that because Georgia film tax credits are transferrable and most productions don’t owe taxes, they sell tax credits to other Georgia taxpayers, which they use as vouchers to cover own tax liabilities. In Georgia, the tax credit costs $230 per Georgia household, which is 3% of the state-funded budget. Studies have also found that most jobs created are temporary and given to out-of-state workers, namely from Hollywood.
Pioneer Institute: Film tax credits create predominately short term jobs, and the majority of this money ends up in out of state movie star pockets, not into local businesses or state revenue.
Tax Foundation: 2016 study found that in California, $1 of every $3 in tax incentives went to projects that would have been filmed regardless of if state awarded tax incentive to the film production or not.
I still support the incentive! It means something intangible that movies are made here. It’s worth it!
I also support the tax credits. It is not extortion from the film industry but competition. And films by nature are temporary and only last about 3 months. Having a healthy production industry provides a creative pool of talent in Massachusetts and helps the image and tourism for the state. Maybe you can consider some restrictions on the salaries of non MA resident talent? Otherwise, please reconsider the bill.
I agree with you Will. We should not be competing in a “race to the bottom.”
It would have been great to have been able to use that $600 million on the T rather than buying 2nd homes for a bunch of overpaid movie stars and funding Harvey Weinstein’s legal defense. Get rid of it!
I can only assume this is a joke… If you have ever been on a film set, you would see its mostly local craft people, blue-collar middle-class family people local to Massachusetts, driving trucks, building the sets, feeding everyone, local police detail and so all. We all live here in the commonwealth and we all would like to continue living here. The tax incentive is critical to our livelihood.
Well, I don’t think these comments or positions are a “joke”.
However, I agree that many locals do get work when productions are in town. Shoots bring interest and excitement to town.
Will, you’re right. The film tax credit is a terrible deal for Massachusetts. Like subsidies to build ballparks, it should be ended and I hope it will.
Will
I agree with you completely. The plus is a feel good effect of seeing places you recognize (sometimes) in a movie. The minus is real dollars.
Thank you for your thoughtful explanation!
I fail to see any solid reason for a tax credit… What do we really gain?
Jobs for people who would get similar work elsewhere?
Boston location ‘in lights’ when the credits roll. Does this increase our tourist numbers??
Lots of disruption and inconvenience for those of us who live here – what do we get paid for that?
Hey there. As someone who works in the industry and on these film sets, I understand it’s difficult to understand but the people that work on these movies live in Massachusetts. Saying I can get similar work elsewhere is like telling a general contractor that they can work anywhere. While this is technically true… that would mean moving their entire family and uprooting them from their homes. Almost 90 percent of us grew up in new england and most of us live in massheschusettes (me included). The tax incentive is integral to our livelyhood. Thousands of blue collar middle class workers depend on the incentives. Its not all “Hollywood” and highpaid stars. Its local truck drivers, police detail, carpenters, electricians, caterers and so on that make up the bulk of what you see.
Doesn’t this logic apply to every industry though? Everything you said applies equally well to welders, landscapers, painters, architects … we could offer any of there industries a 25% tax incentive and really help them out, employ more of them.
Actually it doesn’t apply to every industry. Welders, landscapers, painters, and architects need things to weld, landscape, paint, and architect. Subsidizing those industries won’t increase the demand for their services. There’s a relatively finite amount of work for them to do. If you want to increase the number of jobs, and the tax revenue created by them, you need to subsidize businesses that need their services.
Which is exactly what this tax credit does. It brings films to the Commonwealth, which increases demand for carpenters, truck drivers, electricians, etc. This creates more jobs which increases tax revenue. This increase in tax revenue can be put toward funding things like public transit.
The other thing that needs to be considered is not how much is saved but how much is lost. Sure, you might save $600M a year for those 10 years but you’ll lose approximately +5000 jobs (assuming there’s still a demand for some of the carpenters, electricians, etc. ). How much lost tax revenue is that over that same period. Keeping in mind that if people leave the state to follow their job, that’s not just a loss of income tax revenue, but sales tax, property tax, and whatever consumption tax revenues they contribute to.
Production companies come in from outside the area and hire locals to do the work. The trades mentioned above are simply based here, without productions coming in from outside. In fact, some of those trades mentioned above could be hired to do work by production companies to create sets and locations.
Not really, I think. Production companies come in from outside the area and hire locals to do the work. The trades mentioned above are simply based here, without productions coming in from outside. In fact, some of those trades mentioned above could be hired to do work by production companies to create sets and locations.
Glenda, the film tax credits do indeed increase tourism and the spending that comes with it. There is a reason why the MA Film Office is part of the Office of Travel & Tourism. The head of that office readily admits that they would need an advertising budget in excess of $600 million dollars to mount a world-wide advertising campaign for the state equal to what the state has received from the films that have shot here because of the tax credits. The Cape benefits by, and will continue to benefit for years by, the exposure it received in The Finest Hours. The city of Boston continues to benefit by the love poem to the city and the Red Sox’s that is Fever Pitch. Salem will benefit for years by the exposure it received in last year’s Adam Sandler Halloween movie Hubie Halloween. And the state couldn’t buy for all the money in its operating budget the kind of branding Boston and the Marathon received in Patriot’s Day to name just a few of the films shot here.
The economic analysis that Senator Brownsberger cites does not take into account a tourism “multiplier.” Take into account the increase in tourism spending as a consequence of the films shot here and the cost per job created comes way down. If anyone doubts the power of the tourism “multiplier” of a successful TV show or movie, they need only watch the tourists flocking into the Cheers themed bar at 84 Beacon St. That show went off the air in 1993, yet by recent estimates the annual number of tourists patronizing Boston’s two Cheers-themed bars to be about 750,000. One can’t begin to calculate in dollars the benefit Boston will receive if the upcoming Whitney Houston bio-pic to be shot this fall will have if it becomes a world-wide hit.
According to a recent report from the Consumer Technology Association, streaming services alone are projected to spend $112 billion on new production in the next six months to replenish their inventory depleted by the 40% increase in viewership during the pandemic lockdown. If the state wants a piece of that pie and the tourism dollars that follow it, it should retain its film tax credits as they are.
The House voted unanimously, 160-0, to retain the film tax credits as they are. 23 out of 102 State Senators co-sponsored an earlier bill in the Senate to remove the sunset of the program in 2023. Senator Brownsberger is in the minority on this issue. The overwhelming majority of the House and Senate approve of retaining the film incentive program as is.
I agree with Guy.
Thank you for taking a principled stand on this particular matter. I have always understood that film tax credits cost the state far more than they produce. I want Massachusetts to be a business-friendly state, but that is hardly the same thing as providing corporate welfare. We need a level playing field, with clear, rational regulation (neither confusing nor over-bearing).
Will…i’m stunned…i’m TOTALLY with you on this one. Fear you will get rolled by the criminals and grifters so thick around you, but you got this one right. Let those phonies and grifters pay their taxes. Surcharge their Gulfstreams for all the C02 emissions. Good on ya’ man.
Excellent analysis and correct decision. Concentrated benefits, in this case benefits to the film industry, attract vocal supporters, while the costs are distributed widely among us taxpayers who don’t have the incentives to fight back.
I’m fine with films in Canada pretending to be Boston. And Brits with forced accents
Get rid of this monkey on our backs please.
EXCELLENT WORK!@
I agree with you Will. Your research has been thorough and I don’t think it is in our best interest to continue to offer this subsidy to a single niche industry.
I support your position. I am appalled by states competing by giveaways. Is there an effort to get states to uniformly reject such giveaways? I felt cheated by the G.E. giveaway.
It’s a perennial problem that is interwoven with all of the politics of the country. There are efforts as you suggest, but it’s like many other tough issues — it doesn’t get finally resolved.
Will – you are right to oppose this, and also to critically evaluate the gains in terms of net jobs created. The subsidy recipients often play games with estimating the job creation benefits, using aggressive multipliers on spillover spending from a particular project, and masking that many of the jobs they are claiming aren’t full time, well paying, or permanent. It’s too bad that states can’t band together to resist giving away these tax credits. Under the present system, the more states bid against each other, the less incremental gain to the state net of the subsidies is left.
With the MA film tax credit in particular, it can be earned not just on blockbuster movies, but even on commercials and other films produced by and for large companies. One good thing is that the MA DOR publishes a really good transparency report on targeted tax credits like this one, showing the specific recipient and the amounts granted each year. You can review the Transparency Report for 2019 here:
https://www.mass.gov/doc/massachusetts-tax-credit-transparency-report-calendar-year-2019-final-report/download
Search “film” to find the film credits. It is fun, albeit somewhat depressing reading, for anybody interested in good government and efficient allocation of resources. There’s an excel version of this online as well in case anybody wants to run groupings by industry, claimant, etc.
Thank you, Doug. Helpful link.
A friend of mine who was a producer for NBC Universal told me that the tax credit is most important when filming a series. It isn’t such a big consideration for full-length movies.
Thank you so much for that wonderful explanation. Understanding the issue as I now do, I wholeheartedly support your position.
Very thoughtful explanation. Thank you. I have no real position on this question. Reading yours leaves me thinking it really is too costly and not effective in job creation. While it may be nice to occasionally see MA or Boston on the big screen, and that “might” bring in tourists, or business eventually during the films runs on screens, streaming, DVD’s, etc. I do not doubt the money costing tax payers might be spent better elsewhere.
I agree with your logic completely.
Thinking about the fact that Amazon just bought MGM, I would be sick to my stomach if Massachusetts was doing anything to subsidize their excessively profitable (and, in other areas, highly monopolistic) business.
I agree Will. Let’s find more sustainable jobs that do not require so much of the Commonwealth’s money. The film industry is one of the more glamorous industries and exciting to have locate in Boston. That said, we have enough glamour without them.
Will, I agree with you. We could use that money for much better things than bragging right about a film being made here.
Hi Will,
Hi Will,
I agree with your position. Feature films can generate big money for the actors, directors, etc., and I see no reason for us to absorb a portion of the expenses.
Thanks.
I didn’t know much about this and I’m really glad to have learned more! This does seem to be an excessive subsidy, at the very least.
Thank you very much, Will, for your thorough explanation of the costs and benefits, and the attachment and links you included. Fact-based and sound argument – thank you for the education, you’ve changed my “vote”.
I agree with you Will. The research is mind blowing.
Most of these production companies are owned by very wealthy individuals/corporations.
It is a bit crazy to supplement their and actors million dollar incomes while we have essential workers on food stamps!
With so little financial and economic benefit to Massachusetts, I definitely agree with your position on this, Will.
The movie industry is oriented to their bottom line, period. Of course, that is as it should be, but that industry has done way too much of participating in the negative view of the United States in general, and contributed to the moral decline/decay and if you want proof, take a look at the movies produced in the 1940-1950’s era for comparison. Oh, I see, too patriotic. Really.
Will, continue to march, I support your viewpoint in its entirety.
I have to agree with Will’s position and his non-support. Setting aside emotion and pride for our state, rationally these tax credits are not justifiable from a fiscal or financial perspective as reflected by some of the data offered above. If this is only about jobs there need to be other solutions devised. And the film industry will want a presence here in the end.
I completely agree with these thoughtful points against the credit
I support your decision to oppose the MA film tax credit.
It doesn’t appear to benefit the tax payer or industry worker.
Thank you, thank you, thank you for opposing the MA Film Tax Subsidy. There are so many higher-priority public projects that need funding, as opposed to this subsidy.
Excellent presentation of a complex subject. Thank you. That said, I don’t believe in an “either/or” world (except for COVID vaccinations 🙂 ). I have no connection to the film or tv production industries, but isn’t there some middle ground here that would make the tax concessions less generous while providing some benefit to production companies? Maybe an impossible dream of sorts.
Best
Bob Weber
There are a lot of possible dimension for compromise.
Big fan here, Will, from outside your district. I spoke with my Senator’s office about this in 2019 and was told “we’re getting lots of calls from supporters who are well organized”. This is a standard response; my elected official abdicates responsibility for analysis and good governance and simply says “I’m getting lots of calls from the other side”.
Thank you for being an elected official with integrity who engages citizens, listens, leads and works for just and sustainable policies.
Thanks Will for your thoughtful analysis and I agree that this is not a worthwhile expenditure for reasons articulated by you, many constituents and the think tanks listed. Producers do need tax breaks to come to MA and if they do, go can go elsewhere.
Thank you for your courageous position. As an economist, I know that studies of these credits in several states have repeatedly documented how the subsidy dollars given to the industry far outweigh any increased revenue from associated activity. In other words these subsidies are a sure bet net loser for the State.
You should also be congratulated the thoughtful explanation you provided. You have encapsulated many of the loopholes and sleights of hands used by the industry to milk these tax breaks.
Thanks for the detailed analysis. I’ve always believed the current tax credit was too generous.
Thank you for your courageous position. As an economist, I know that studies of these credits in several states have repeatedly documented how the subsidy dollars given to the industry far outweigh any increased revenue from associated activity. In other words these subsidies are a sure bet net loser for the State.
You should also be congratulated for the thoughtful explanation you provided. You have encapsulated many of the loopholes and sleights of hands used by the industry to milk these tax breaks.
Great explanation! I support your research and believe these overgenerous tax credits should sunset. People will still want to film in Boston and Massachusetts because:
Matt Damon and Ben Affleck need Southie, Back Bay is cheaper than NYC for period dramas, and Ryan Reynolds likes to eat in the SouthEnd.
I take issue with the negative characterization of ‘short term jobs’. This means supporting free-lancers and gig workers. There are many who do short term work, not just media production people. I’m thinking of my dad going from site to site as a carpenter. Traditional jobs are on the way out, and we need to increase support for gig workers.
The credit may not be the most efficient way to do that.
With regard to the credit, I think a modest compromise is wise. Provide enough incentive that we are considered when productions are being sited, but reduce the size of the subsidy substantially.
Personally, I can’t get behind the argument that we are subsidizing non-massachusetts residents, that is just a bit of jealousy that does not belong in the analysis. That has nothing to do with whether it benefits us.
Consider this: If we offer no tax credit, and there is no local movie production, our tax revenue is not improved over a scenario where we offer the credit and have a local production.
Can you show the math for this assertion? If the state collects (say) another million dollars in revenue (from income taxes on wages, meals taxes, etc.) by giving a production ten million dollars in tax credits that other people use to reduce the taxes they pay, ISTM we’re down nine million.
Will, I agree. Phasing it out over 5 years should be fair to anyone who claims they made investments or have work based on the credit.
Easy for you to say. I’m guessing you don’t have millions of dollars invested into a business that services the film industry. And lots of employees who’s families rely on the film industry. It’s either close our doors or move to a state that is film friendly. I’m one of many Mass based businesses in this predicament right now.
Thank you for this very cogent analysis about which I knew very little. I find your argument extremely persuasive, and I completely agree with you. Sure, it’s always a thrill to see our city in a movie, but I had no idea the extent to which we are subsidizing such extravagant expenditures out of taxpayer funds.
Hello Will,
So, here’s a note to change the imbalance of feedback you have been getting on Film Tax Credit. (And by the way, thank you for your post)
I fully support your opposition to the film tax credit. Not only is it not fair to other industries, it’s not fair to Massachsuetts tax payers.
That we pay 25% of a movie star’s obscene contract fee is unacceptable. And, temporary jobs are just that, short-lived and should not be subsidized by the tax payers.
Thank you.
Joseph
The information you present makes it quite clear that the film tax credit is not a good way to spend MA tax payers’ money.
Thank you for your work and we support your opposition to the credit.
I think this tax credit doesn’t help Massachusetts residents enough. The benefit isn’t strong enough to keep it.
Senator,
I just wanted to reply and let you know that I, too, oppose the film tax credit in its current form, as well as most forms of this kind of race-to-the-bottom interstate corporate subsidy competition. You likely haven’t heard from constituents who agree with you because it’s just a pretty low-salience issue for people whose only connection to it is as a taxpayer, but we’re out here!
The best way to handle this would be weighing the $amount of tax revenue lost from the credit v.s. the amount of added jobs who pay taxe$ that didn’t exist without it, minus the cost burden of those in the industry bring to the state. I personally don’t think it will balance (fuzzy logic) to the revenue side.
It is not like the restaurant industry where the meals tax comes off the top of the gross sales(your meals bill) and therefore is lucrative for the state to bring back this industry.
That is the kind of analysis that the DOR reports do in a pretty sophisticated way.
I would like that logic be applied to who pays for and who benefits from public primary education. It seems to be dumped on the local property tax payers without consideration of who is carrying the burden
“Massachusetts effectively pays $2.5 million for the movie star’s salary.” Hmmm, I might be the first to sneer if a Fidelity exec. made the argument I’m about to, but MA is not paying anything, right? It’s forgoing hypothetical tax revenue. If the films or shows aren’t made here then there is in fact no lost tax revenue cause they didn’t do the work here (or remotely from New Hampshire ;). Am I missing something?
I don’t disagree with your general point in terms of fairness or worthwhileness. If my best friend’s boyfriend wasn’t an actor I wouldn’t care, but, sound though your reasoning is, I could see your action causing my friend to leave the state from her boyfriend’s work leads drying up. Then maybe I’ll leave too. As unix/network programmer I don’t have much attachment to any particular place, particularly a Boston without my friend. That’s not a general argument of course, but I’ll put it out there, since I know you ask for feedback for a reason.
If it’s to go I’d hope some amount of credit or subsidy would be shifted to the arts in its stead. If you wipe out the local film industry that’s yet another thing making Boston this realm of computer programmers, finance folks, healthcare/pharma people, the general working class and others not affording their rent and on their way out, and not much else.
Who in the state government is it that takes stock of where we are culturally? Probably there are better ways of funding the arts than paying large studios, but I wonder if there’s not some kind of ecosystem where the big things allow the smaller things a meal ticket. Er, sort of the arts equivalent of the car manufacturing supply chain with all it’s various parts suppliers, etc.
I may be wrong, but I believe the major cost to the state is when the recipients of these tax credits sell them to others. If a production company has unused tax credits, I, a MA resident, who has nothing to do with making any sort of film, can buy them from them (typically through a broker) at a discount (usually somewhere around $0.95 per credit $1) and use them to offset my personal tax liability that I would have otherwise had to pay to the state, so MA is losing the tax revenue from me because of these credits. If the production company never received the credits, I wouldn’t have been able to buy them to off set my liability, and MA would be that much richer.
Wow, that’s weird. I mean, it partly is ordinary. Looking at 38X of state law:
https://malegislature.gov/Laws/GeneralLaws/PartI/TitleIX/Chapter63/Section38X
“(e)(1) All or any portion of tax credits issued in accordance with the provisions of this section may be transferred, sold or assigned to other taxpayers with tax liabilities under this chapter or chapter 62.”
“Under this chapter” I get. So you can give to another film company who would qualify under 38X. So it makes the total amount dispensed for film bigger. Whatever.
But the “or chapter 62” part is puzzling. Chapter 62 is all of state income tax. So it’s like you say, they can transfer it to any old person paying income tax? That is very bizarre. Let’s have a credit to encourage some arguably desirable activity but let’s also create a tradable commodity out of it that can be redeemed by whoever.
I wonder how big the amounts traded or given to non-film people are (assuming my interpretation is right — I am so not a lawyer). Any patterns in who these credits go to (no members of the house I hope)?
It is high time that the Film Tax Credit (giveaway) was terminated. Apart from some pride in being able to say to friends and acquaintances – “Oh, I know where that is!” when commenting on a film there is little value that STAYS in Massachusetts. Nobody is going to come to the state as a tourist to peruse a particular set in any movie. Most of us agree with the attitude of “Buy American” how about ‘State taxes should STAY in the State’ to benefit Massachusetts.
I totally agree with you, Will. Keep on opposing the MA Film Tax Credit.
While it is nice to see movies that were filmed here, I agree that the credits are ultimately not worth the “benefits”.
The numbers.
The numbers do not work. Dump it.
The romance factor is way over done. Put that money to work, intelligently and substantively, elsewhere.
Thanks for putting this together Will! Apologies for the book that follows.
I am all for the tax credit, but I think we should be more judicious about which projects should be eligible for this credit. Our state is not hurting for money so it’s not like we NEED the business that a blockbuster production brings to the state. And from the readings provided above, it sounds like the state really isn’t getting all that much from the opportunity. I agree that it is cool to see Boston as the backdrop for a movie, but some of these productions are making tens or hundreds of millions of dollars in profit at our state’s expense, while providing the world with an artifact of little to no artistic or cultural value.
To add insult to injury, the state sees none of those massive profits. I’m not trying to make a case for profit sharing (though it would be cool). I’m just trying to say that the main output of a blockbuster movie like Ted 2 (filmed in Boston for 68M, grossed over 215M worldwide) is profit, and our program helps them achieve those profits with so little in return. Studios get rich, and we get 6-12 months of elevated business volume in film-adjacent industries. Cool I guess?
But of course, not all film is about making money. Film is also an incredible way to tell stories which can’t be told in another medium, and great films can transcend generations, open the mind, and spark new ideas. The artistic potential of film is massive, and that is why many international state governments will produce or co-produce films with artistic merit. They are not trying to make a profit; they are trying to tell a story they think is important for a wide audience.
In that vein, I think it would make sense to revise the program to prioritize productions that can prove their project is providing cultural value in a significant way. The program is a wonderful idea for smaller/arthouse productions that could really benefit from the tax credit in order to realize an artistic or culturally-important vision. I am more than okay with the state “losing money” on productions like this, as they advance our understanding of humanity and propel us into the future, enlightened. I would imagine that as a state we’re spending a lot more on a single forgettable blockbuster than we are on the majority of culturally important projects combined.
I’m fairly inexperienced with how this tax credit works, so I apologize if the above doesn’t really align with reality. But I do know that our state is in a position where we can and should say no to bad profit-making ventures when we are not among those profiting. Instead we should be saying yes to projects that have real artistic and cultural impact.
I agree with Will and Luke too. Hotel chains, sports franchises, corporate headquarters, car manufacturers, and so forth all play off cities and states to get the most subsidies. These are generally large wealthy corporations.
So suppose we weed out major film producers and only give the credit to small productions, say under $1M budget or even less? These are the filmmakers who really need subsidies. So why not cap eligibility?
I’m OK with this line of thought. I am willing to support the arts in a more targeted way. That is much of the conversation that will happen over the coming weeks.
Ditto this!
JSYK: production cost of $68M against gross receipts of $215M does not generate a huge profit; the rule of thumb is that breakeven happens when receipts are three times costs. The difference goes to various places; e.g., movie theaters get to keep (very roughly) at least a third of gross sales. (Theaters aren’t necessarily rolling in money either; buildings cost money, staff must be paid, etc.)
That being said, a credit for small productions sounds worthwhile in theory, but I’d want to see details: what would the rules be and how do the numbers come out? It’s possible there wouldn’t be enough effect to be worth the cost of administering.
“Since arriving in the legislature in 2007, I have opposed the credit, while all constituents contacting me about it have urged me to support it.”
As a constituent who has reached out it is really disappointing to see that contacting you makes no impact and you have refused to consider the people you are meant to represent.
Also, the numbers here are old and do not accurately represent the current industry. Numbers from a 2015 report likely came from 2013 or earlier. It takes time for an industry to grow and be established, to take numbers from the first 10 years of the incentive and use them as proof that, guess it doesn’t work! is silly and short sighted. The industry now is significantly larger and more profitable now than it was in 2013. And will only continue to be if it is allowed to continue.
That goes for the “51% is non-resident/out-of-state businesses” from the 2016 report you referenced too (again, likely numbers from a few years earlier). The infrastructure simply wasn’t in place because the credit was still relatively new and competing with that large number of states you also referenced. Massachusetts has emerged as a leader and top contender with people now moving to Massachusetts specifically for this work.
I know it is easy to make this about “Movie Stars” because who wouldn’t agree they make enough money. It’s easy to talk about them than to talk about the working class people this actually impacts, they’ll make their millions either way…we won’t.
And finally, you say the incentives are more generous than the incentives given out to other industries in the state, but I would argue we are more generous than they are when it comes to local residents and businesses. We pay local restaurants to put fake signs in their windows, we pay neighbors to park a truck in their driveway, we rent church parking lots and VFW halls. We put money directly into the hands of the neighborhoods we film in. That money isn’t in your reports but I personally hand out those checks. I’ve never been paid, or frankly even notified, when a construction crew parks their truck in front of my driveway.
Again, I know we are an easy industry to attack because we seem like out of state millionaires here to make a movie for a few weeks then run back to California or something, but I assure you, I live here and I plan to stay here, in Watertown, not Hollywood.
I respect the work you do. I feel that the industry is wrong to build itself on tax credits that depend on political advocacy — that makes real people like you who are on the ground in the industry more vulnerable. They should go where the conditions are right without asking for huge tax handouts from states.
We are great movie fans (and have enjoyed movies made in Massachusetts even when we roll our eyes at how the movie makers play fast and loose with locations. Once upon a time the tax credit sounded like a good idea, a way of luring the industry our way. No longer, and your explanation is very clear and convincing. Thanks as always for reaching out with information and looking for feed-back.
Will,
Your well thought out decision makes sense. Thank you.
Vote as you see fit. Reasonable people can argue in good faith about the costs/benefits of the film industry insofar as it affects the local economy. I don’t smell any tainted money flowing in your direction over this issue. That’s always my #1 concern when political controversy erupts. Especially here in Massachusetts, which (according to the late lamented Gore Vidal) has been the most corrupt state in the union since the early days of the Republic. An old friend of mine used to be the bag man for a high official in state government, and I’ve spent many hours talking with lots of other insiders. So I know a thing or three about how these issues can be affected by filthy lucre. Vote as you think you must. And show lobbyists (of all political stripes) the door when they start wooing you with possible….ummm… “favors”. Your constituents will respect you for it, even if some might disagree with how you vote. Unfortunately I have to recuse myself from voicing an opinion one way or the other on this matter: whenever feature films are being shot on location here, I always try to sneak into the chow line. And get generous servings of great food for free. It’s not the same as accepting a cash bribe, but………
btw: I often find myself wondering why Boston’s Museum of Fine Arts lacks a wing dedicated to political corruption?
I am in complete agreement with you Will. There’s no need to be low balling for the movie industry.
Thanks for the explanation. I support your position. Years ago I had a producer from a TV sitcom call to push me for freebies: commercial products I was product manager of. In this case, he wanted a $30,000 workstation to use as a prop on their set. He attempted to push the same appeal to star power and vanity as these industry lobbyists… “we’re Hollywood, give us free stuff and lots of eyeballs will see it and you’ll be part of the show”. Its BS. Other businesses get no such favor. If they need a Boston or MA location to support their story, let them pay for it or rewrite the script. I want lower taxes, not subsidies for the self-important.
I agree with your logic. The movie industry does not need welfare.
I would like to share my reason for agreeing with Will. The question of film credits is just one of many thousands of decisions we all make in the service of balancing our individual self interest with protecting the commons. If everyone focused only on their short term individual gain, there would be no commons and no society. When someone contributes to a charity, it is likely that the individual’s gain is minimal. When someone pays taxes to support education but has no children, he/she is supporting the collective. Many soldiers in WWII were acting to support something larger than themselves. During the last 50 years our culture has moved further to “if I do not personally gain, the hell with it.” I hope that this shift can eventually be reversed because without a change, our children and grandchildren will be living a dystopia. The film credit is a minor example, be we have to start someplace or the outcome will be inevitable. We as individuals have to lead the culture, which is a bottom up process. Culture change is not done in the legislature but that can help set the tone for others to follow. I am using the film credit only as an example, which when multiplied by 1000s of similar decisions create the future. I applaud Will, who may be putting his political career at risk if the voters only want a me-first representative. Greed is not just the prerogative of the supper rich. When I wake up in the morning, I have to ask myself: “who am I?” To set the records straight, my friends and colleagues who know me well cannot figure out if I am politically far left or far right. Here is another paradox from social science studies, The rich feel poor and justify not helping others, while the poor are often helpful even when they cannot afford it.
Well said, Barry, well enough for you to make it into an op-ed!
To me, this me-first tendency of the general public is the consequence of late-stage predatory capitalism that has un-evened the income pie in a winner-take-all way. So naturally, when all the best deals are gobbled up by speculators with deep pockets, people want to cash in too. It forces Americans to emulate them, and that’s what we’re seeing.
That said, I think the film subsidies should remain in place but capped according to production budget (say $1M or even less) to benefit independent filmmakers, many of whom already live here.
Thank you, Barry.
Will, please keep opposing this and others like it! The next generations, are being saddled with tens of thousands of dollars of debt EACH by our negligence. Please help them!!
Janet Yellen, Sec. of the Treasury proposed a ‘minimum’ corporate tax. The purpose was to overcome to some extent ‘the race to the bottom’. Countries offer low or no tax years for business location. States, cities, and towns offer reduced property taxes to compete for business division to locate in town. We witnessed the 2nd Amazon Headquarters competition. Corporations win, the public the countries lose.
first how can I cash in on this deal ? does my Youtube channel count ?
Seriously – certain incentives are needed to attract business and we have two types here – A permeant studio and let’s go to Mass to make a film. I am in favor of a tax credit to a company that agrees to set up a studio here and the tax credit should be based on the size and the number of “Full time Employee’s” which should make up 90% of the tax credit and a minimum operation of five years (where they get half the tax credit for the current year and a bonus at 5 years ) This would create a long lasting full time employment. We could do similar thing for other industries as well and not just make this about the film industry to encourage business to come to Mass. I am not genius when it comes to tax proposals but like I often have thought that capitol gains taxes should be reduced to zero over a 20 year holding period – so if you flip your house or stock overnight for a killing – you get hit with a 90% tax on that gain, if you hold your investment for 20 years – your gain is free. Same thing with the film tax credit – half now half in five years if you are still here at the same level of employment.
Yes. A compromise position is to try to structure the credit to do more to create Massachusetts jobs as opposed to rewarding non-resident millionaires.
Thank you for NOT supporting film tax credits.
I agree with you that the current tax credit seems way to generous for the
benefit we receive. However, I agree with a couple of others who think
there may be some compromise solution such as cut the percent of the
tax credit or have individual movies allowed a credit if they are deemed
to be educationally or culturally beneficial to the citizens of Mass.
Will,
I would take the average incentive we pay in other industries and offer the film industry that. They can take it or leave it. The jobs that we will be creating in the near future in high tech and related industries will dwarf what the film industry will bring in, and they will be long-lasting jobs.
Keep up the fight, will. Hollywood glamor and tinsel is no substitute for justice.
Ray
I think this is naturally a topic where those in the industry who are positively affected by the tax credit will of course be heavily in support of it, and those of us who have no connection to it know very little. From your analysis it appears to be a bad deal for the state. However the state is made up of the people you serve. To arrive at a real opinion I would need to know how the state would otherwise use the approximately $80M estimated as “lost”. Could/would that money go to other job creation efforts in a more impactful way? Or will it “disappear” into less impactful buckets? It appears you have two years left to assess the landscape. My question to the state, and you, is what will happen next if you eliminate this? Will that $80M be earmarked for something great? Or will the only impact that the taxpayers see be the loss of jobs for some MA residents? I approve of doing something more impactful but in my experience that is not always how government functions in reality. So if you advocate against it, what will you advocate to use the money for?
Without the film tax incentive, there’s no revenue gained. The money is off the table.
The “lost” 80 million is based on money SPENT in Massachusetts. Without productions coming to Massachusetts and spending money here, there’s no tax return on investment, and the money spent by productions disappears, along with my payroll taxes, my excise taxes, my state taxes and other fees paid to the state.
As for overpaid actors, they don’t get a tax credit. The production company does. The actors pay state taxes on their salary just like anyone else. If the work is performed here, the taxes are paid here. When the actor goes back to where they came from, another one shows up, does their job, pays MA state taxes on their full salary, and so on.
In turn, hundreds of local tradespeople and businesses also pay into the MA tax pool as a result of their employment and local spending.
For instance, my department employs a mobile diesel repair company to do preventative maintenance on our film generators. We budget 40k minimum for this routine maintenance *per show*, which is typically ~240k+ in revenue per year that comes from another state and is paid out to a local small business. This business employs mechanics and buys trucks and equipment here. They provide benefits and pay a living wage. That employer is an example of the value of the tax incentive’s reach and an offsetting revenue source that is rarely considered by people who oppose film incentives. There are hundreds of examples like this, and they increase as the industry grows here.
To get the tax incentive here, the money needs to be spent here. That money spreads and grows.
A friend of mine recently was analyzing the impact of film on the economy of LA. It was shockingly dull. Even where it’s the big deal, “the dream,” it’s not so much. I have credits as DP, writer, editor, costumes and sets. 25% is mind boggling to me, but none of my credits are for financial econometrist. As another pointed out, perhaps it is a race to the bottom. At least at that rate.
As I began to read your reasoning, I was skeptical. I remember when there was effectively NO film industry in the area. Students who graduated the myriad schools like Emerson and every major university’s film, theater, etc., departments had to go to NY or LA, when really the departments themselves should not be in Boston, at all. You are basically saying there is no need for an industry, here. I can accept that, on some level, but I can’t understand why you go after film before you go after the exempt status of religion. The waste of it.
For once, I entirely agree with you. Keep opposing the Film credit.
Not a one of the films that was shot here has ever given ticket discounts to the MA residents who subsidized their productions. The movie moguls want to socialize the costs but privatize the returns.
Nothing to say that hasn’t been said but I agree with you! No thanks to these tax breaks.
Will,
I agree wholeheartedly. I remember that Mike Widmer was adamantly opposed to the credit when he was head of MTF. I usually respected Mike’s point of view on most subjects.
It is a wasteful subsidy. You are right to oppose.
Will,
I am a local playwright but the most the State of Massachusetts would ever “subsidize” me would be the $12,000 Arts Lottery grant, which I have always applied for but never gotten. So I am with you on this, end the exorbitant subsidy & funnel
some of that tax money back to real Mass. artists.
You’ve framed the tax credit as something that “costs over $600 million,” but my understanding is that the credit is more like leaving money on the table. I get that it is unfair compared to what the state offers other businesses. But film making is a pop-up business, and without the credits, projects don’t pop.
I believe a more compelling detail in the Mass Gov source you cite is this: “Over the calendar year 2006 to 2015 period, the film incentive program resulted in $474.5 million in net new spending in the Massachusetts economy.”
I think there is a misunderstanding about the scale of the credit. If I got a 1% tax credit on computers purchased for my online tutoring business and went out and spent $10,000 extra because of it the state would collect $600 extra in taxes and then rebate me a credit of $100. This would be a great credit because I end up paying more in taxes even after factoring in the credit.
Now suppose the credit is 10% but everything else is the same. Again I pay $600 in taxes but get $1000 (not a typo) from the government, so the government is paying me $400. The bigger the credit gets the more money the government sends the companies. The film tax credit is so big the government is losing around $50 million a year on it.
No question that there is net new spending and that does help Massachusetts. But the bottom line question is what do we get for the money the state is spending and whether we could get more by spending the money a different way. The study finding is that the cost per new job is over $100,000. That’s how much the state had to spend to create the new jobs. The actual median wage of the jobs was $75K. (See page 18 of the 2015 DOR report.) We could create more jobs and get more back in a lot of different ways — many areas of state and local services could be improved.
The 2015 DOR report shows the figures from the previous 8 years before the incentives had been allowed to work to their full potential, in part because they were constantly under attack by the legislature. Studios and local companies were afraid to invest long term. The industry has just started to gain momentum again since then. The average cost of jobs has decreased exponentially, yet the DOR is derelict in their duty to honestly report the real numbers without bias.
Wil,
I appreciate the comprehensive explanation of your position. Though I tend to agree with the basis of your argument and don’t feel the state should be subsidizing specific industries to this degree, in the interest of fairness, the intangible marketing value of positioning Boston as even equivalent venue to New York and LA does offset some component of the costs.
I have strong negative feelings about the MA film tax credit! Thank you for this information and opposition to them. Taxes, ideally, are not oppression, they’re justice.
We paid the film industry a massive bribe to convince America that Boston is an impoverished crime-ridden hellhole where Irish mobsters mow each other down in the street and the entire population is on heroin. So there’s that.
Amen to that. I guess if that what it takes to draw tourists to Beantown we should grin, say “Pahk ya cah in Hahvahd Yahd,” and suffer fools.
Hi Will,
Good discussion, lots of insights for and against the credit.
Those against the credit look at everything from a purely accounting view point looking at direct costs, there is “no positive return” on investment from the film credit.
Missing is applying a value to the “intangibles” benefits that the film industry brings to the Commonwealth to balance off the investments. Select all the data (indirect) and not only selected cost data (direct) in the analysis. How do you put a value on pride (okay, not everybody is into Boston movies)? The Emerson example is not factored in to the analysis. Emerson film producers in the past went to NY/LA, to look for meaningful professional work. Are we taxing the film industry workers (stars) who do work in Massachusetts on location, not just the local residents? If not, what can be done to keep some of the tax revenues of the big stars? Why haven’t we attracted companies and editors to do the film post production in Massachusetts. We have Emerson and the MIT Media Lab as expertise centers in the State. We need to look beyond the simple balance sheet in making a decision on the local film industry credit by accounting for all of the intangible benefits we are and can derive from this industry.
Agreed that there pride benefits that are hard to value.
I agree with you. It’s time to end this giveaway.
Will, a few thoughts for this needed discussion.
1. Your analysis emphasizes the value of “jobs created” which you show providing a very limited return. However, I could understand this analysis better if the economic impact of indirect contributions to return from the business generated to hotel, taxis, restaurants, and all other businesses related solely to the making of a film. Like convention centers which are financial losers except for the economic energy they stimulate, do we understate the true financial positive impact of a film being made here?
2. There is a surprising width and depth of film related professionals in this State. How much impact does working on a film done here carry over by relationships to films made elsewhere? In other words if permanent jobs are not significant, are professional relationships in film making (including the world of advertising) made or expanded for people in the field living here for projects made elsewhere?
Always appreciate your hard work to frame important issues.
Thank you, Peter.
To the first part of the question, the “jobs created” analysis does include those indirect jobs in hotels, taxis, restaurants. Most of those expenditures are included in the direct claim for the tax credit. The “jobs created” analysis also includes the multiplier effects of spending in the economy generally.
To the second part. Sure, there are definitely intangible benefits in relationships, etc. But I’m not sure what is really left after the whirlwind of a feature film comes through.
Thank you, Will, for you insight and courage. We support you all the way on this issue.
The presentation is excellent. The impact statistics and summary conclusions are clear and solidly support my opinion; the state should eliminate the MA Film Tax Credit.
P.S. Off topic but… Let me know if you ever need support to eliminate tax incentives for professional sports which is totally out of whack.
Let the film industry shake down other states. We benefit by our diverse economy, world famous hospitals, colleges, universities, technology and rich in history. Millions come to Massachusetts and return over their lifetime. Subsidizing the film industry is a poor investment in tax dollars. The film industry brings no sustaining value to Massachusetts. Our message to them is we do not need you.
Will:
Terrific explanation of how the Mass film tax credit offers little benefit to Massachusetts!
I favor eliminating the tax credit right now.
Thank you for not supporting this waste of taxpayer money!
Suzanne Bloore
We really need federal legislation to address these tax credits and other incentives state and local governments give to all industries. Ideally we should only support aid for projects that the public can use and can last long term such as infrastructure improvements in the immediate area. I say no this credit as money should go to to projects that will generate more long term jobs such as North – South station rail connector or cleaning up super fund sites.
I’m glad to read words of opposition to film tax credits. I can’t see states forming a United front again coercive- slippery slope, but MA can reap other dividends by ending these corporate hand-outs.
I’m glad to read words of opposition to film tax credits. I can’t see states forming a united front against these coercive expectations, but MA can reap other dividends by ending these corporate hand-outs.
I continue to support the Film Tax credit, I think it represents Both Employment, continued access for persons interested in entering the Film industry as well as Economic opportunities for the tax payers of Massachusetts ?
Senator… rather than write this in a blog, why not call each of your constituents back that has taken the time to call you and explain to them why you support this position you write about in your blog?
I do also respond to my constituents individually.
You are right on. This film tax credit has been a boondoggle from the beginning. Thank you for taking the time to analyze the impacts and take a stand against continuing the credits.
I don’t completely understand this tax credit…how is MA paying $2.5M for a $10M actor who shoots in MA? Is the tax credit saying there’s no income tax? I’ve been a non-union background extra, and I can assure you, taxes were taken out as an individual at the reasonable & customary rate and I didn’t have any say over that, even to try to ask that they not be withheld due to low cumulative income that effectively made me exempt and which I then needed to wait a full tax cycle to try to file to get them back.
I don’t really see the problem with this tax credit. Aside from a line about EITC, I don’t see any discussion for where that money is proposed to be reallocated and spent to.
Collecting funds, especially potentially sizeable funds, is a terrible idea without a spending plan in place for how you’re going to spend it all down and not have administrative overhead eat up funds.
A sizable portion of the MA state budget goes to fund law enforcement and the prison complex system…are you proposing legislation that would earmark and make 100% of these proposed collected taxes non-fungible and to be earmarked to increase capacity in other state budget line items that are tied to the provision of direct services (ex: funding increased Section-8 and subsidized affordable housing?), as opposed to removing fungible line items and reallocating them to general program distribution, elsewhere?
Currently, there are lots of taxes collected which as far as I can tell, aren’t really being spent out and instead are sitting in accounts accruing interest with a lot of obfuscation (ex: MassPike toll fees that somehow no one can say why that can’t help subsidize or remove the request for additional parking meters, increased MBTA fares, gasoline taxes, “convention center” fees which feel like nonsense for Zipcar users and those who rent cars from the airport, which tends to be the cheapest location, sales tax, food tax, etc.). Is the food convenience tax going back to small businesses at risk of closure? Because that would sound like a good use for that kind of a tax. It’s completely unclear where certain taxes are going? Why aren’t property taxes better funding public schools, allowing all of them to have a FT school nurse or school busing or better paying support staff? Why are the numerous nonprofit educational institutions sitting on $Billion dollar+ assets only paying nominal taxes in lieu of regular ones? Percentage wise, colleges and universities take up a sizeabke geographic area in Boston and their contributions are negligible due to their tax shelter and alternative taxes paid and those institutions aren’t going anywhere, unlike the transient film industry production.
Collecting more taxes, just for the sake of it, sounds like a terrible idea, especially if the current taxes collected elsewhere aren’t readily transparent and accountable to the general public.
Taxes collected by government are supposed to be re-disbursed for the common public good.
It is so incredibly difficult to 1) qualify for EITC and 2) it’s like a bell graph in terms of how much funds one qualifies for, best case, you’re talking maybe a couple hundred dollars, a.k.a., the best case scenario for what a non-union background extra might hope to make for 1 extended day of shooting. Isn’t EITC administered at the federal level and not state? It also requires someone actually earning income in a given calendar year, which completely discounts anyone who doesn’t have earned income due to circumstance, schooling, or disability.
Prior to the film tax credit in MA, there wasn’t really all that much that was shot in the state, compared to post tax credit. Even what’s shot in the state is arguably negligible. It’s halfway through the year and there’s maybe been less than 10 major productions shot so far as I can tell. Most of those productions are only in MA for maybe a couple of weeks, up to maybe a couple of months, if that. They’re very time-limited.
If you remove the credit, the big productions that have budgets will just leave the state, and then the hypothetical non-collected tax money will disappear with it, anyway. You should be running these econometric models for what the scenario was like prior to the tax credit, adjusted for inflation.
Not a great scenario, but it sounds like leave the tax credit, miss out on collecting taxes, but at least some gig workers might get lucky with a nominal day rate one-off opportunity. Remove the tax credit, still don’t collect money, but no opportunities, even nominal ones. Either way, the state isn’t collecting funds, but in one scenario, possibly others may nominally directly benefit, and in the other scenario, no one benefits. There will be some productions that move ahead and stay in MA due to geographic limitations (prob. smaller local productions), but the larger ones will very likely go because they can afford to exercise their purchasing power elsewhere and they’ve got zero emotional ties to the area.
The film tax credit is a boondoggle that benefits a very few local workers at enormous expense. I don’t believe the value of location shooting in MA does anything for tourism or anything else productive for the commonwealth. This is exactly the type of special interest tax loophole that should be eliminated. I would rather spend the money on public transportation or local arts organizations that enrich the state on a year-round basis.
Overall, the appeal of the film industry to legislators is great enough that notwithstanding objections like mine, many support the credit. Over the next few weeks some form of compromise is likely to emerge. Good key paragraph Senator.
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Your concern on what these film credits have become is
correct! Yes, Senator the industry has been given a gold mine- with good intentions by Massachusetts -but due to a film bureau and policies needing guidance- YOU need to find in your compromise!
The entertainment Industry -Senator- as we know – before it becomes
via its story telling part of our culture – is lst and foremost a “business”
We saw this with again the ability for Amazon to buy MGM for 9 billion plus and their limited experience in the field! It is a business for them to connect with their food stores- packaging and delivery systems.!
The challenge for Government- and her agencies- partnering with
a business is not part its vocabulary and I would say most of its employees not versed in the field.
From the start government is in 2nd place playing catch up!
With my background in the field of communications besides
having a Masters in public adm , years ago I introduced film making in state parks when I was Director of Revenue for DEM now called
DCR – We had a good journey for awhile with helping film students without cost and film makers covering staff time and out of the experience making a donation to the Conservation Trust to help that particular park
Alas – some other parties came in with oh we will charge xyz for a permit and be done with it. This lost all the incentive for both sides. I suspect film making is almost non existent today in our parks and the film students struggling without our help!
Good luck with finding a compromise- and be cautious of those
organizations representing us all Massachusetts has about every type of site for filming- Under the right circumstances we can be “onward” but not under the current environment. The status quo- is a no win for anyone! bill
ps Apr 26, 2021 — Massachusetts House lawmakers sought to remove the sunset on the … amendments involving tax credits before giving initial approval to the … any differences before the budget heads to the desk of Republican Gov. Charlie Baker, who has previously sought to eliminate the film tax credit with little success.
It is fair for the industry to ask, and it is fair for the state to agree or not. We are blessed with the federal system, where state governments compete with each other. It is a good thing.
Also, if we think that reducing taxes on movies will lead to better movies and economics – why not do the same for other industries?! Try, as an experiment, reducing taxes and see whether it will bring more industries into the state.
Thousands of Massachusetts residents will suffer with a change in the tax incentive.
I have $100 million to spend at either Massachusetts businesses or California businesses. Where should I go to spend my money? Massachusetts is going to give me a tax break, so I decide to spend all $100 million dollars at Massachusetts small businesses. The state may not see all the tax money, but at least the small businesses get my $100 million. Those businesses will benefit and will pay taxes on that money. If I spent the money in California, those small businesses in MA would see nothing. That $100 million is now floating around the Massachusetts economy, not to mention, Massachusetts residents are also getting jobs. This is the film tax incentive in a nutshell. Don’t complicate things with numbers and studies. Hollywood money has to be spent somewhere, so keep it flowing to MA businesses and residents. The state isn’t losing tax money because the productions wouldn’t be here spending money without a tax incentive. We should be looking at ways to create more industry in our state, not ways to kill jobs. Kill the local film industry and you will have thousands of hard working residents collecting unemployment and turning to SNAP and low income housing. We should be looking for ways to stop this cycle.
You say, “ If Massachusetts were willing to pay 25% of the costs of any other particular industry, Massachusetts could likely become the world leader for that industry”. You can’t compare the film industry to any other industry. The film industry is the only industry that will go into a different neighborhood everyday and hand out hundreds of thousands of dollars to neighbors to create their film product. A film company creates a mini stimulus throughout a local economy wherever they film. They rent homes and parking lots for filming locations and places to park equipment. They rent church halls and VFW posts to feed the crew. Most other industries setup shop in one location and the money stays within the building.
You can’t fault film companies for wanting to film where they can save the most money. Whether you are a billion dollar company or a local consumer, everyone wants to save money. Why do we have tax free weekend? Maybe we should think about getting rid of that. Maybe if you make over a certain amount of money you shouldn’t be allowed to participate in tax free weekend since everyone is so upset about millionaires getting tax breaks.
Massachusetts has had a booming film industry for the past fifteen years. People have moved to Massachusetts, bought homes and are raising their kids here because of the local film industry. Other people have started companies that support films such as prop houses, film equipment rentals, trailer rentals, visual effects, editing companies and sound stages. Making the tax incentive less attractive will mean that thousands of residents will lose their businesses and their homes. If giving a tax break to a millionaire or a corporation would be all it would take to end homelessness, would you do it? Would you be so against corporate welfare that you would choose to let people remain homeless? Sometimes life is about giving a little of something you don’t want, in order to help the greater good. It is easy for people who are not in the film industry or not making money from the industry to say to get rid of the tax incentive. If their job was on the line, they would do anything it would take to save it. Other people who are not in the film industry will not see their lives get better just because the film tax incentive was cut.
Please consider the lives that will be destroyed with a change in the incentive. The productions will leave Massachusetts and in the end, there will be no extra money in the budget when the industry is completely gone. Please save local film jobs and keep the incentive alive. Thank you.
We should keep the program but change it to focus on small and local production projects. I feel state subsidies should serve to bootstrap local producers and associated entities. There must be bottom-up ways to build a robust film industry in the commonwealth without kowtowing to big studios, Amazon, Netflix, and the like. Mass needs to think smaller and longer-term.
The incentive program also caters to local companies such as WGBH as well as a few dozen small, local commercial production companies. The full time jobs created by those companies alone are all local, and number in the hundreds. Many of these jobs are in Senator Brownsberger’s district and many of these employees are his constituents.
Well said. I agree with this position. Incentives are there to make things happen that would not happen otherwise. Incentives are an investment in bringing in the work. [How about the big incentives to the major non-film company that relocated from Connecticut to Mass. not so long ago (sorry, I forget the name of the company) and then that company went essentially belly up. The promised benefits of having the company here did not materialize at all. This raises more questions about the advisability of offering incentives to anyone.] At least with film productions, lots of people and businesses do benefit from having the work here. I admit I don’t understand all the figures, or the part about selling incentives, but I do see the benefit of bringing in work that boosts the overall economy.
Hi Will:
Thanks for the explanation. I agree with others that you’ve taken a reasonable position. I’d rather see this kind of expense go to job training and re-training, to help people gear up for the future.
Two things to consider: 1) More higher budget productions will be filmed on green screens and with computer-generated graphics, so they don’t need any physical location at all…that will disrupt the industry greatly. 2) Lower budget, independent films would not be able to be made without the credits — if we want new/younger filmmakers and diverse voices to be able to work in the industry then we ought to be funding innovation in the film sector as we do in other sectors. Consider modifying the credit to help productions up to a certain budget but don’t eliminate it, or many hardworking people in production will be out of jobs.
Will you’ve just exposed the type of greed that most politicians garner. The state of MA hasn’t paid anything, the tax incentive allows the money spent to effectively go untaxed. When you sell it to the public that they’ve paid for something, of course it’s going to get people riled up.
Tell the truth. You see an industry where you could make a quick buck and basically kill the production film industry in the region. If no other states put out a tax incentive it would be a different story. But if you want to keep a growing and building production economy with decent paying jobs to support the students coming out of the very institutions that draw people to the region then the tax incentive should stay. That’s how communities stay together and grow. People buy homes and build families. Side businesses and small businesses thrive off this industry. The economic impact goes way beyond the greed numbers you post. And ultimately that’s what this all comes down to. Yes, shame on the film industry for lobbying for such a thing across all the states. But shame on MA for not supporting its own labor pool in that industry if they don’t pony up and sit at the table and offer their citizens an opportunity to compete. It costs MA nothing but letting go of it’s greed to tax something they see they could tax.
I’ve long supported the film tax credit – working in an area that benefits from the commercial TV/film industry. Our non-profit has worked with location managers and producers and we have been able to place interns and freelancers on film sets in Massachusetts.
However you have convinced me otherwise. You are correct, Will.
The cost far outweighs the actual benefits to taxpayers and the local film industry. And you make a very good & ethical argument against film tax credits, in general.
At the end of the day, it seems to me that the majority of benefits of the film tax credit are going out of state and to those people or entities at the top of the food chain, not to the creative and technical workers in the local industry itself, and at a great cost to taxpayers.
Good work Will.
I agree, Jeff, and you should know of which you speak. Still, let’s not eliminate the tax credits but refocus them on indie producers and associated entities in our own commonwealth. Were the leg to cap the benefit it would discourage big studios from applying to the benefit of smaller and hopefully local productions.
Will, I agree with you fully!
I may be one of the few, if only, lone voices here. So I’ll pipe up.
First, I agree with and understand Will’s and all of the comments above arguments for opposing the credit.
In fact, what I wonder is if there were a way to provide tax credits NOT based on 10 million dollar movie star/director salaries? The bill, in mind, would make more sense to the general public.
And just wanted to point out the other side – that is, people (like me) who are in the industry, but in the arts and/or documentary side. We all teach to make ends meet. Not complaining, just noting that we are light years away from 7 figure salaries.
Our productions have helped social causes immensely. James Rutenbeck’s recent project, ‘A Reckoning In Boston’ is the most incisive take on Boston racial politics I’ve seen yet. But it’s done beautifully, empathetically – not in a preachy way.
Also, the industry brings much more to the economy than just the ‘cool factor’ – that it’s made in MA. It puts Boston on the map, keeps us in the conversation about the US as a whole. It’s subtle but powerful force. Boston has a persistent race/class problem which, bit by bit, has been improving, in part due to local film productions exposing this bedrock of provincialism.
Still, Will presents a thorough, thoughtful argument. If they could solve the insane salaries associated with the stars, then the tax credit would be helpful to our industry and to MA as a whole.
I knew none of the details of this arrangement. Your data and analysis convince me that you are correct in your opposition to continuing the credit. Thank you, Will.
I Support the tax incentive. It’s unfortunate that the idea of “Hollywood” is this idea of opulence and high-paid movie stars driving around in Bentleys. If you go to one of these movie sets what you will actually see is local new england born blue collar workers. Local carpenters, local police officers, local caterers, local teamsters/drivers, local electricians, local city and town officials and so on. If you drive around the state you will also see the studios and retal houses (warehouses that store the equipment we use) that are owned by locals and pay local taxes. The people that rely on these tax incentives are normal local new england workers. Yes our employment is “temporary”, but I think that is an unfair thing to be critical of. Any construction worker is out of work once their job is completed and then they bid on another building or job and the trail keeps rolling, we do the same. Most jobs are temporay, yet we all work full time.
I know our world can seem closed off and sometimes it’s a little hard to conceptualize the backbone of movies and tv (that being local workers and communities) when the word “hollywood” is used politcally and negatively. Film sets also actively closed off from the world and try to be secret (this is for safety reasons but also so the surprise/story isn’t ruined, and almost every company tries to keep their IP secret until release) and this can come off as pretentious and dismissive. It’s hard to connect and see just what/who is working from outside the industry (And trust us, we all know it’s annoying when we close a street or cause traffic, and were sorry). Just know we all love Massachusetts. Most of us went to school here, still live here, have family here, vote here, and survive the insane housing cost because of these tax incentives. We can’t just go work else where. Yes, the “industry” chases the best deal (that’s just business, you do it, the company you work for does it) but us workers and our families are static, we live in communities just like everyone else. I, and thousands of others depend on these tax incentives to survive. Without it, our livelihood is at risk. Sure the “industry” will pack up and go elsewhere, but I’m sure as hell not moving to friggin California.
I lived in “friggin’ California” (Los Angeles) for 25 years. And yes, there are many people there who work blue-collar jobs on film and TV sets. The difference is that taxpayers don’t fund their jobs.
Quick reminder that the industry doesn’t benefit unless they bring in work that employs local residents, stay in local hotels, eat from local restaurants, and support local businesses.
Sen. Brownsberger—
The reason you are being asked by constituents to support the Film Tax Credit is because there are so many ordinary working people whose lives have been improved by the program.
Your arguments against the tax credit lean heavily on the DOR report on the program. The DOR report is a notoriously skewed analysis that ignores many of the ways production dollars get cycled into the economy. Meanwhile, you entirely ignore the report from Industrial Economics Inc. (IEc) of the Castle Rock series. The IEc report is most comprehensive study done to date of the full economic impact of a Massachusetts-based production. Among the findings of the IEc study is that each tax credit dollar issued generates $4.73 in economic activity in the state.
As you point out, most states have some version of a media production incentives. Few of these programs are working as well as Massachusetts’. Our provisions are not the most generous, but they provide sufficient incentives for productions to come to the state. When states roll back their programs, the movies and series go away (here’s looking at you, Rhode Island).
I write as an artist and an educator. It frankly galls me that you and some of our readers would destroy the Film Tax Credit without offering viable alternatives for sustaining creative careers in Massachusetts. Note that I say careers. Arts councils and community programs inspire artists and raise public awareness, but they cannot provide the economic fuel needed to sustain jobs. Until that fine day comes along when we are ready and able to completely rethink how we support our artists and craftspeople, anyone who cares about the development of a vibrant creative economy should support the Film Tax Credit.
Thank you, Charles, for sending on the Castle Rock report.
I have reviewed it and it is consistent with the DOR studies — the film spending does have multiplier effect in generating activity.
What the DOR report does that the Castle Rock report does not do is this: DOR factors in the cost in lost state spending on other goals. All state spending has a multiplier effect, so that it if one is choosing among alternative state spending programs (whether direct spending or tax expenditures), on needs to net that out.
I sense you have dug in on your position, which is a huge loss for all the working people in your district who are part of the growing media industry. I will nevertheless offer a few quick amplifications and corrections. The DOR reports on which you base your arguments rely on data that are more than five years old. The findings of the Castle Rock study challenge many assertions made by DOR partisans. Furthermore—unlike the DOR reports—the Castle Rock study accurately measures job creation and the full economic impact of production spending. In contrast, the DOR has repeatedly used the roundly discredited concept of a “negative multiplier” to arrive at its flawed conclusions. For anyone still reading, I would conclude by asking you to set aside your preconceptions about tax credits. Media production is a unique industry with special opportunities, benefits and challenges. Massachusetts’ incentive program has a proven record of success. Join us in keeping this vibrant sector of the creative economy alive!
I have read the Castle Rock Study. I don’t contest it as far as it goes. But I really think the DOR inclusion of the foregone benefits of alternative spending is an appropriate adjustment.
Dear Will,
I acknowledge and respect we have our differences.
But as someone who is one of your constituents and works in the industry as a Set Decorating Coordinator, what has been presented here are half-truths and it is insulting. How many of us as a collective whole choose to relax and unwind watching films and television? This is an industry that has been around and has contributed to the country in more ways than not. Especially in times of conflict and struggle.
The main focus is always centered on the big names of “Hollywood”, and what is being forgotten are the thousands of locals that make up this industry here in Massachusetts. Boston is not Hollywood, and it will never be Hollywood because it doesn’t have to be. The information that has been presented here is from 2015 and does not reflect what has been done since then.
On a daily basis, I work directly with our local vendors setting up accounts, PO’s, and check requests. We spend and pay them directly. Those local vendors vary from antique markets, framers, drapers, furniture, print shops, hardware, tile, carpet & flooring businesses, prop warehouses, party rentals, storage units, etc. The list goes on. I am representing just the set decorating department. But so many other departments such as locations, art, costumes, productions, grips & electric, construction, etc. need and depend on local businesses for us to function. The tax incentive incentivizes that all projects must spend money within the state. Even though they are not paying state taxes they are paying directly to local vendors that otherwise wouldn’t have such an economic impact. Unlike the car or the steel industry as you have previously mentioned to me, we source our materials locally.
There are mentions of how this industry is all temporary and not permanent. The reason it is temporary is due to the fact that the decisions are being left in limbo to people who live and act in fear because they don’t understand.
This is the first time where so many students with film degrees are getting jobs right after graduating. SO many of us have crippling debt due to the excessive price tags of college degrees. In the past, everyone has had to leave and go to either NYC or LA. Why must we do that? Why aren’t the arts properly funded and supported to fully exist here in Boston? This tax incentive paves the way for so many forms of art to thrive and survive. It has brought back many taxpaying locals (like myself) who had to leave because they couldn’t make a living here in Massachusetts. But now they can and want to continue to do that. I urge you to have a dialogue with us and come see what we actually do. Rather than write us off as “Hollywood.”
Thank you!
I had no idea the tax credit was so high. Much as I enjoy seeing movies that are shot in Massachusetts, the state is sufficiently beautiful and photogenic that many should be filmed here anyway. (If they want to go to Croatia to make a movie about Boston, more power to them.) By all means reduce the credit, or get rid of it altogether. There may be some marginal filming choices as a result, but I doubt we’d experience a boycott by the film industry.
By the same token, taxpayers should not have to fund sports facilities unless they are used part-time as a benefit to the public, or admission fees for Massachusetts residents are subsidized.
It is time to recognize that we are living in a gig economy and that full time jobs have gone the way of the dinosaur. My son has a business connected to not only the film industry but the tv industry, commercials, and documentaries. The loss of the film production would jeopardize all of it. He hires up to four people work permitting. They all make an excellent living. He also hires truckers to pick up and deliver equipment to the set. He also films in other states bringing money into Massachusetts. He has invested nearly half a million dollars in sophisticated equipment necessary to provide state of the art production. When “Defending Jacob” was produced in Belmont I and many of my neighbors received minor payments (some received substantial payments) for being part of the set. The town of Belmont received a substantial payment for the “disruption” created by the extra traffic, not to mention the payments made to several churches for use of temporary space, drivers providing transportation to the set, and police officers for extra traffic control and security. The film industry pays its way and the tax credits make it possible. The Commonwealth of Massachusetts cannot tax production that takes place in other states; therefore, it is hard to describe taxes not paid on production in Massachusetts as lost revenue since the production may well move to other states and not provide tax revenue anyway. That would truly be lost revenue due to the lost income taxes paid by all of the gig employees working on local production sets.
I don’t want to pay for your son’s job with taxpayer-funded tax credits. And the producers did not compensate all the passersby and non-location residents who were inconvenienced by the film/TV shoot in Belmont, did they?
The ROI on this is absolutely terrible. Any business looking at this return would say it is a non-starter. However, the taxpayer is always taken advantage of by outside pressure (and money) on politicians. Time to end this practice, and, in particular, this credit. There are far better ways to support jobs and take care of people in this state. Hollywood can afford their own productions. Thanks for speaking out on this Senator Brownsberger!
I agree with you, Will. Let the film credits expire. Thanks for laying out the details and your analysis. I lived in Los Angeles (within the city limits) for 25 years until 2014 and witnessed/was inconvenienced by many film and TV location shoots. I also saw many celebrities, which is not all it’s cracked up to be. If producers (who have plenty of $$$) want to film in Mass., they should do so without tax credits. For all who feel their jobs are threatened, please consider the cost to taxpayers of your jobs! (Hint: I don’t want to pay for your job)
I never understand why laws like this have to include absurd loopholes like the one where businesses can sell their tax credits. Is this like cap and trade? Why is that included at all? I agree with Mike S above that Boston is not as culturally robust as some other places—we are heavy on finance and biotech. I would like to see these credits revised to support only local artists/workers. If not possible, use the money to support all the arts in another way.
Curious, why does that matter mathmatically. If a film sells it’s credit to big pharma for example, for 80% of the tax value. The film wants the fast turnaround of funds, and the state collects EXACTLY the same amount of money they would have. Is there a mathematical basis on why you don’t like a transferable credit?
Thanks for the background infomation on film credits. I agree with your analysis.
I believe Community College programs and vocational technical high schools and post-high school programs at vocational technical high schools, including partnerships with Massachusetts businesses, are worthy avenues for job stimulation. High school students and high school graduate should have the opportunity to learn vocational skills.
Great detailed explanation, thank you. I agree with you in not supporting the subsidy.
So the state pays $100,000 per job, those short term jobs such as catering and building sets clearly average less than $100,000 a year, and the movie company pockets the difference. We should all stop working and start making movies.
Thanks, as always for clear analysis and encouragement of dialogue.
I have always agreed with your position on the film tax credit.
Thank you for explaining your position on the film tax credit. Film-making involves a whole range of behind-the-camera crafts people who can only hone their skills by working on films. If the state becomes hostile to making films here, local film students and all those skilled crafts people who earn and learn are the losers. A state must have a permanently hospitable environment with a skilled workforce and a credit that can be counted on, since film projects require many years lead time to raise funds and book talent. The state needs to build on its current momentum, and that requires stability. Changing the credit would kill a lot of the industry. The arts already get short shrift from government as it is.
It seems ironic that when the Four Horsemen of development ride into towns, suggesting, not too subtly, if they don’t get what they want, well, they’ll just go somewhere else, elected officials are all too often open to their blackmail.
I live in Brighton MA. I went to high school in Medway. My guidance counselors encouraged my pursuit of film. I became a freelancer in production in 2013. Instead of moving to LA, I stayed here because my state invested in my career. And I’ve spent 8 plus years working in my hometown, proud to show off the skilled craftspeople we have right here in Massachusetts. These jobs are not for the Hollywood elite, they are for your neighbors in town, who love to work here and show this amazing city to the world. IF you you kill the FTI, you will end the worlds opportunity to get to know us better. Boston deserves to keep the spotlight on it and you ignoring the impact on all of our families, in your community that vote for people who represent us, is unfortunate. I hope you reconsider how very damaging this would be a to a thriving and contributing industry that impacts far more here than anyone in Hollywood.
Will – I am usually a fan of yours but I think your stance on this is misguided and borderline disingenuous. I’ve seen all the points you’ve made and the crux of your argument isn’t that the credit is bad for Massachusetts, it’s that the credit isn’t good solely for Massachusetts, and therefore not worth it. Yes, the credit benefits out of state residents. It also benefits MA residents. Yes, you’ll save money. You’ll also lose jobs, residents, tourism, and ultimately tax revenue. It seems like you’re just interested in punishing the film industry for taking advantage of the choices afforded to them, and you’re willing to uproot the lives of thousands of MA residents to do it. I work in tech, I am not married, and my whole family lives in NY State. The tax credit doesn’t benefit me in any way shape or form, yet I’m still urging you to please rethink your position. Ending the tax credit will be a huge blow to the people who depend on the film industry for their jobs and it’ll be on your hands if it happens. Please consider trying close the loopholes in the credit, rather ending it. Peoples and their livelihoods are counting on you!
Thank you, Will, for presenting your position on this issue in such detail. I also oppose this tax credit. The money could be spent on more beneficial programs, such as transportation or environmental protection. Then again, some of that money could be used on the arts in this state, because they really need help to survive, let alone thrive.
Did you know a large amount of our skilled tradespeople in film , television, and commercials also work in the arts here? Getting rid of the tax incentive hurts everyone.
Sadly, this is an extremely uninformed stance. I’ve been talking with Will for years on this issue, and he won’t see the math. I do applaud him for sticking to his ideals (Which I share, btw), even to the detriment of our state financially (Which I don’t share).
The film tax credit brings MILLIONS of dollars into the state. This has been proven by a decades long study in Colorado and other states have found it to do the same for them.
The way it works, is that when a film project starts, local people get hired. They pay income tax. Local business get increased traffic. They pay sales tax. Local police and fire get detail opportunities. They pay income tax. Equipment is trucked in. They pay tolls and gas tax. And so on… It is a substantial gain to the state which offers the credit.
Now, to Will’s objection. No industry should be given a tax credit. Period. I concur. However, as long as ANY state offers a tax credit, those states which do not suffer from the lost business that the states which DO offer them gain.
The appropriate solution is that no state should offer them. But, that’s not going to happen given the competitive nature of our society and country. Therefore, we need to continue to offer the credits until NO ONE ELSE offers them. In this way, OUR economy thrives over the states who do not provide the incentives.
Respectfully, when you continue to use a study to justify your stance, that was incomplete, and shown to have faulty conclusions by multiple subsequent studies that were done over YEARS following it – it really shows that there is an agenda here that has nothing to do with doing what’s best for the state or the people of said state.
It was proven that for every 10 cents the incentive supplies in an incentive, a dollar is spent in direct spending into the local economy. Either you have read the information that has been studied more in-depth over the last 5 years and you know you’re misrepresenting the issue, OR you don’t know and you have a stance that mathematically hurts the state. Either one is a representation of politics at its worst.
I live in Newton Mass. I’ve been a resident in Boston or the surrounding area for 22 years. The businesses I spend money at are local businesses. I’ve worked my way up to being a department head and the 20 to 40 people who are working on my crew are all locals. They all have families. Most of us have been able to buy houses. Pay taxes that support our schools, fire departments, police. We hire Fire, Medical and Police detail officers to be with us constantly and they make a better living with our support.
Stating that the money “mostly goes out of state,” is a complete fabrication and not represented in the factual information or studies that have been done SINCE the incomplete one sited here.
The film and television tax incentive is simply a net positive on every level. It brings good paying jobs into the state and gives thousands of blue collar regular people like myself an ability to make a good living, buy property and raise a family. When you hear that this industry employees thousands of people, each one of those people represents a family, meaning those thousands of people they site really represent hundreds of thousands of people.
FURTHERMORE, film was one of the first industries to get up on it’s feet in Mass during Covid. We were shooting safely back in September of 2020. The studios spent Millions of dollars JUST to test people multiple times a week and try to ensure we were back to work during one of the hardest times in my lifetime.
This is one of the rare times where policy can be a wholly net positive from a numbers standpoint. Literally, every point made in this post to try and defend getting rid of the tax incentive or to hamstring it (knowing that will essentially kill it) is not factual.
This is a post by someone with an personal agenda who is putting the fact that he doesn’t like something in theory, incentives, and being willing to hurt hundreds of thousands of people in Massachusetts instead of accepting something he personally doesn’t like is better for the state and it’s people.
I sincerely hope people will take the time to find all of the actual facts in this case. Real peoples lives and careers hang in the balance. Thousands of us have invested large sums of money to start support businesses or to buy the tools and infrastructure to do this job. I’ve invested over 40,000 in tools to become a department head and I’m still paying it off.
Please do the research, learn the truth of the numbers and support this incentive. And make it known that people who support damaging policy for personal reasons will not have your vote or support come the next election.
Thank you,
Joseph Gagnepain
Dear Will, we have not seen each other for a while due to COVID, you may remember better as Abby Furey’s husband.Over the years at various charity functions we have disagreed politely about the tax film tax incentive. I think we understand each other’s position. However in this crucial moment for the film industry in ma. I believe you are using bad information to bolster your vote. There is an old saying, there are lies damn lies and statistics, After the last four years I believe we have to read very closely.
I can tell you that the tax incentive works, I would love to meet with to discuss it. To keep it short here let me make three quick points,
I believe the tax incentive is working, the numbers you cite are manipulated to win an argument.
Besides the 30+ members including me who live in your district most of whom are paying mortgages, paying taxes, and supporting local businesses there are another 1000 members of my local [IA 481] plus teamsters, plus dga, plus all the young freelancers starting their careers, plus all the small businesses we support both individually and as an industry. In your district alone you have Redsky Studios, largest lighting house in New England, Rule Boston Camera, largest camera rental house in New England, and Talamas, the largest video and sound rental house in New England. All are small businesses. I cannot begin to list all the businesses that benefit from the film production, but I can tell you that the tax incentive works. It benefits labor and small and med sized businesses.
Last let me tell you about working on The Perfect Storm many years ago. Gloucester was in a bad way, many problems. When we filmed there we gave a quick much needed jolt to their economy and then when then the film came out tourists came back to Gloucester to see where the story happened. I believe that movie helped jump start their revival. Recent projects have been shooting all over the state, recently I worked in the beautiful town of shelburne falls, hopefully the rest of world will see it and want to visit.
If their is anything I can do to convince you or anyone that the tax incentive works please contact me. Thank You, billy flanagan
Hi Billy,
I do believe it works. I don’t that at all.
My problem is that it doesn’t work efficiently to benefit people in Massachusetts.
For the money we are spending on it, we could benefit more people in different ways.
/w.
Thank you for this explanation, which confirms my opinion that subsidies are not a good plan. I appreciate your staying on top of this issue.
Will,
Good for you. Classic late-20th century/early 21st century American capitalism: Privatize the profits and socialize the losses (or costs).
Those looking for a compromise, here’s one from an Adam Smith capitalist, not an Ayn Rand one for the industry and country as a whole: Make the States equity partners–their tax credits gives them a share of the profits. See how quickly the industry runs to raise the money as they should instead of through extortion (let’s call it what it is). Along with Hollywood, the NFL, NBA, NCAA, etc., don’t merit these subsidies.
Dear Senator,
We have exchanged lots of communication over recent weeks, and I thank you for personally responding to all of my inquiries. That being said, I take issue with much of this recent blog post.
If the #1 concern for your constituents is the preservation of the Film Tax Incentive, it is baffling that you’d choose to oppose them. Unlike you, they and their families have much to lose if the program is discontinued.
As for myself, I am a grip and electrician for film & television. That means I am part of the lighting crew. My work duties include but are not limited to setting up 20’x20′ light reflectors and 18,000 watt fixtures that get tossed around in the wind & rain for 12, 13 or 14 hours a day – not exactly glamorous. I don’t live in “Hollywood” (which itself is only one neighborhood in Los Angeles – most California production takes place elsewhere in the region). I live in Watertown. Most of my life has been in Massachusetts. I am not rich, but I do all right. I do not have a “permanent” salaried job. Almost no one in film & tv does. Like construction workers, we work on a project-to-project basis. Thanks to the tax incentive, I have a union card and earn a decent middle-class living. To dismiss non-salaried “temporary” livelihoods as unworthy of investment is reductive of the work we do, and short-sighted as more and more Americans enter the gig economy.
The pandemic has proven that streaming sevices are a vital utility in all our lives. How many shows & movies did you and your family watch during quarantine? I have worked for nearly every big studio/network/steaming service at one time or another (there are only about 6). Like all major corporations, they will shop around America and the rest of the world for where they can get the best bang for their bucks. We have one of the most favorable economies and best workforces for such work anywhere. They might as well spend their money on us.
Eliminating the sunset date and removing the stifling provisions proposed by the senate will demonstrate that Massachusetts is dedicated to this ever-expanding industry. Sound stages, equipment rental houses, visual effects companies, costume shops and other industry necesities will be built here, many providing the “permanent” jobs that critics of the FTI are so eager to site. Local hotels, hardware stores, drivers, construction firms, security teams, restaurants, electricians, and vehicle rental companies will be able to count on the shots in the arm that productions have been providing their businesses for years. People will move here. They’ll buy houses and pay taxes. Those of us who already live here can stay and make lives.
Senator, I am not part of some “Hollywood” extortion squad. I am just a Massachusetts guy making a living who would like to continue to do so close to my roots & family. I encourage you to visit the set of one of the several productions currently gearing up for shooting this summer in the Bay State. Most of the people you meet there will be folks like myself – blue collar, hard working Massachusetts residents. We have the potential to make our state a world headquarters for the film & television industry. Our labor creates one of the only “Made in the USA” products that the world happily consumes. Please don’t send our futures elsewhere.
The film tax incentive has allowed a strong industry to grow in our state. Do you know how many small businesses have been established directly benefiting directly? Ask the local hotels how much revenue our industry spent during Covid? I’m a tax paying homeowner who benefits from this incentive. I carry my family insurance from my work in my local. We are not numbers, we are people supporting our families, buying houses, starting businesses, creating jobs. Eliminating this tax incentive not only hurts our highly skilled Massachusetts locals, it will have a rolling affect on tourism, hospitality, and numerous other sectors. There is a reason others are trying to get you to listen. Why don’t you research what happened in Louisiana when their tax incentive disappeared? Guess what went with it?
Dear Senator,
We have exchanged lots of communication over recent weeks, and I thank you for personally responding to all of my inquiries. That being said, I take issue with much of this recent blog post.
If the #1 concern for your constituents is the preservation of the Film Tax Incentive, it is baffling that you’d choose to oppose them. They and their families have much to lose if the program is discontinued.
As for myself, I am a grip and electrician for film & television. That means I am part of the lighting crew. My work duties include but are not limited to setting up 20’x20′ light reflectors and 18,000 watt fixtures that get tossed around in the wind & rain for 12, 13 or 14 hours a day – not exactly glamorous. I don’t live in “Hollywood” (which itself is only one neighborhood in Los Angeles – most California production takes place elsewhere in the region). I live in Watertown. Most of my life has been in Massachusetts. I am not rich, but I do all right. I do not have a “permanent” salaried job. Almost no one in film & tv does. Like construction workers, we work on a project-to-project basis. Thanks to the tax incentive, I have a union card and earn a decent middle-class living. To dismiss non-salaried “temporary” livelihoods as unworthy of investment is reductive of the work we do, and short-sighted as more and more Americans enter the gig economy.
The pandemic has proven that streaming services are a vital utility in all our lives. How many shows & movies did you and your family watch during quarantine? I have worked for nearly every big studio/network/steaming service at one time or another (there are only about 6). Like all major corporations, they will shop around America and the rest of the world for where they can get the best bang for their bucks. We have one of the most favorable economies and best workforces for such labor anywhere. Streaming services alone projected to spend $112 Billion just in 2021 on new production and technology. They might as well spend their money on us.
Eliminating the sunset date and removing the stifling provisions proposed by the senate will demonstrate that Massachusetts is dedicated to this ever-expanding industry. Sound stages, equipment rental houses, visual effects companies, costume shops and other industry necesities will be built here, many providing the “permanent” jobs that critics of the FTI are so eager to cite as marks of success. Local hotels, hardware stores, drivers, construction firms, security teams, restaurants, electricians, and vehicle rental companies will be able to count on the shots in the arm that productions have been providing their businesses for years. People will move here. They’ll buy houses and pay taxes. Those of us who already live here can stay and make lives.
Senator, I am not part of some “Hollywood” extortion squad. I am just a Massachusetts guy making a living who would like to continue to do so close to my roots & family. I encourage you to visit the set of one of the several productions currently gearing up for shooting this summer in the Bay State. Most of the people you meet there will be folks like myself – blue collar, hard working Massachusetts residents. We have the potential to make our state a world headquarters for the film & television industry. Our labor creates one of the only “Made in the USA” products that the world happily consumes. Please don’t send our futures elsewhere.
I hope you’ve looked through the comments. My constituents overall have very mixed feelings about the fairness of the credit.
We will likely reach some kind of compromise.