Mass. film tax credit
As part of his first budget, Gov. Charlie Baker wants to get rid of the state's film tax credit, which was passed in 2006. While the plan has received support from some quarters, key Democratic legislators have raised questions about the plan, which could lead to a showdown when the House and Senate take up the budget in the coming weeks.
Why does the governor want to ditch the credit?
Cutting the credit, Baker reasoned, would help pay for a doubling of the state's earned income tax credit, from 15 percent to 30 percent of the federal limit, as a way to help some of the state's poorest citizens.
Officials of the administration questioned the effectiveness of the film tax credit, which costs the state $80 million a year in revenue. According to the State House News Service, the officials pointed to a 2012 study by the Department of Revenue that found two-thirds of jobs linked to the tax break were created out of state, and that the cost for each job created in the commonwealth was $108,000.
What does the credit provide?
If a production house spends more than $50,000 in any year in Massachusetts, it's eligible for a tax break equal to 25 percent of its wages paid within the state.
How much has it helped the state’s economy?
The DOR study said the credit resulted in $67.9 million in net new spending in the Bay State economy in 2012, and $260.9 million from 2006 to 2012. On the jobs side, the DOR said there was a net gain of about 730 full-time-equivalent positions in 2012, a figure that includes jobs held in other states. However, there was a net gain of 622 new jobs for non-Massachusetts residents in that same year.
Who’s with Baker on the proposal?
The Boston Globe endorsed Baker's proposal in an editorial. The right-of-center Massachusetts Fiscal Alliance also endorses the plan, as does the Massachusetts Budget and Policy Center. The nonprofit, nonpartisan research organization argues that the tax credit is expensive when stacked up against the additional tax revenue it creates.
Who’s against it?
Within the legislature, House Majority Leader Ronald Mariano, for one, said it was a “pretty good move” politically for Baker to link the film and earned income tax credits, but questioned Baker's assessment of the former, according to State House News Service.
At New England Studios in Devens, the state's only full-service production studio, spokeswoman Justine Griffin released a statement that warned of potential repercussions for “thousands of Massachusetts jobs in the film industry,” and immediate consequences for New England Studios.
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