Would you fund movies or environmental programs?
Back-to-back State House press conferences today showcased the type of choices Gov. Deval Patrick and state lawmakers have to make as they strive to balance the Massachusetts budget.
At the first event, Rep. Steven J. D’Amico laid out his case against the state’s film tax credit, which effectively pays movie producers 25 cents for every dollar they spend shooting a film in Massachusetts. More than $125 million in credits are expected to be issued in the fiscal year starting July 1, unless Patrick succeeds in winning passage of legislation that would cap the program at $50 million.
The $125 million is real money that won’t be available for other state programs, like the state environmental programs that were the focus of the second State House event hosted by the Environmental League of Massachusetts.
The two press conferences were not coordinated. They were simply scheduled back to back in the same hearing room, but their juxtaposition shows how the governor and lawmakers have to choose where to invest state tax dollars. Right now they’re choosing to invest in movies and not in environmental programs.
D’Amico says the movie investments offer a poor return. He says the state issued $113 million in film tax credits in 2008 to generate 1,807 full-time-equivalent jobs, of which 1,064 went to Massachusetts residents. Citing Department of Revenue calculations, D’Amico says each Massachusetts job cost the state nearly $90,000 to create. He said the average salary of the Massachusetts jobs was $67,775, or $22,000 less than they cost.
Moreover, D’Amico says, the state is spending nearly $90,000 to “rent” that Massachusetts movie job for only one year. If the tax credits were eliminated or scaled back, he says, the job would disappear because film producers would take their movie sets to another state offering tax credits.
Joe Maiella, president of the Massachusetts Production Coalition, stood up and defended the tax credit, saying the numbers cited by D’Amico ignore or downplay the economic benefits of the program. He said the state is getting a very good deal, spending 10 cents for every dollar of economic activity generated.
On its website, the Massachusetts Film Office invites visitors to meet Massachusetts’s newest taxpayers, and then features pictures of stars like Bruce Willis, Cameron Diaz, Sandra Bullock and Leonardo DiCaprio (pictured above), all of whom have shot films here and will pay taxes on the money they earned here. Of course, all of those stars live outside Massachusetts and will presumably spend most of their earnings where they live.The debate over movies vs. environmental programs, or any of hundreds of other state programs facing budget cuts this year, will come to a head soon. Patrick says the Legislature needs to act on his film tax credit cap by the end of March to curtail the expenditure of tax credits in the coming year. His prospects for passage don’t seem good, as House Speaker Robert DeLeo has already suggested it may not be the right time to do anything that would lead to fewer jobs.
D’Amico, who has been railing against the film tax credit for a long time, is used to being a lone wolf on the issue. “This is Hollywood,” he says. “They’re in the business of weaving dreams and rationality goes out the door.”