Boston Herald Editorial
Monday, June 2, 2008
Back when director Norman Jewison set up his cameras outside a bank on Congress Street and in 19 other Massachusetts locations for “The Thomas Crown Affair” (the old original one with Steve McQueen and Faye Dunaway) who’d have thought the Bay State would be on the verge of becoming Hollywood East 40 years later?
Since the restoration of state tax credits for film production in 2006, 17 major movies have been filmed in Massachusetts. The state Film Office claims the tax credits have been a bargain – and it just may be right.
The Department of Revenue estimates that those 17 productions spent $545 million in the state, earning $136 million in credits. The Film Office estimates that every dollar of direct spending creates another $1.50 indirectly. For example, a catering company providing food to actors and crew spends those proceeds on wages for its own crew and supplies.
Such “multiplier effect” spending is often over-estimated, but the multiplier the Film Office uses is reasonably conservative. That means movie-making puts $1.36 billion into the local economy, counting direct and indirect spending. Taxes paid the state will be at least 5 percent of that, or $68 million. The net lost tax revenue is only half the amount paid out in tax credits, or $68 million again. That’s the cost of generating the $1.36 billion in spending – a nickel on the dollar.
Other indirect benefits are almost certainly greater than that. The Bull and Finch Pub is still drawing tourists 16 years after the TV show “Cheers” set there ended. At least a few people will vacation in Massachusetts (instead of Vermont, say) just to try to see a game in Fenway Park, where “Fever Pitch” played out. (Those not lucky enough to get tickets may settle for a tour.) And the shots of Boston and Cambridge used in “21” are enough to make any prospective college student bump local schools to the top of his list – even if MIT isn’t in the cards, so to speak.
Any expansion of film activity, such as constructing sound stages, must be judged cold-bloodedly – but comprehensively, as we have tried to do here. There are indeed limits to taxpayers’ generosity.
But right now the film tax credit has proven its worth.