Battle brewing over tax breaks for families vs. filmmakers
House leaders on Tuesday rose to the defense of a sometimes controversial tax break for the film industry after Gov. Charlie Baker put the program on the chopping block to help pay for the expansion of a different tax benefit for low-income families.
While top House Democrats described the earned income tax credit (EITC) as one that enjoys broad support among lawmakers, Baker's proposals to double the EITC and eliminate the film tax credit could meet resistance from lawmakers who say they've seen the benefits of the film industry in their communities.
"I have been a big supporter of the film tax credit over the years. I've seen firsthand what it has meant in terms of the local economy, things I don't even think are looked upon when you consider the film tax credit," House Speaker Robert DeLeo said.
DeLeo described a visit to the Chelsea Chamber of Commerce where he heard from small business owners, including a florist, a delicatessen owner and someone who rents furniture, of the positive impact on commerce.
Baker's budget, due to be filed Wednesday afternoon, will propose doubling the state's EITC to 30 percent of the federal credit, returning an additional $936 in tax returns to qualifying families with three or more children by the time it's fully phased in by January 2018.
To offset the $145 million cost of the tax break for families, Baker has proposed to simultaneously phase out the film industry tax credit created to help lure big-budget movie productions to Massachusetts. The $80 million film tax credit would be eliminated from the budget by June 30, 2017.
Describing the benefits of the film tax credit to the economy as "middling," Baker on Tuesday said expanding the EITC would provide a direct benefit to working single mothers.
"It's one of the best ways I can think of for the commonwealth to send a loud message about wanting to make work pay, especially for those who are working hard every day to pay the bills and pay the rent," he said.
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