House speaker: Jobs from gambling, movies are key to helping state

Outlines his plan to prime the Massachusetts economy

By Nancy Reardon
Quincy Patriot Ledger
October 14, 2009

QUINCY — The answer to the state’s budget woes is job creation through expanding the gambling and film production industries, House Speaker Robert DeLeo said Tuesday. Defending the state’s push for gambling and its controversial film tax credit program, DeLeo told The Patriot Ledger editorial board that one of his priorities is job creation.

“The biggest issue we have is providing jobs, jobs and more jobs,” he said.
DeLeo said the most effective strategy for pulling the state out of its fiscal crisis is a long-term approach, but also talked about the need for more immediate budget cuts.

DeLeo said he plans to file legislation to bring resort casinos to the state in 2011. He also noted his longstanding support for slots at racetracks. The Legislature was scheduled to take up the gambling debate this fall but pushed it back. DeLeo said it wasn’t a delay tactic, but done to make sure there’s time to “get it right the first time.”

He also said the film tax credit is a “good investment” for the state.

The state offers filmmakers a tax credit that equals 25 percent of what they spend on production and payroll costs in state. Many film companies sell those credits at a discount to firms and individuals that are based here and can claim the credits against their income taxes.

DeLeo admitted he was skeptical of the program at its inception. But he recalled visiting a TV shoot at the State House earlier this year and learning that most workers on the film crew were from Massachusetts. When asked what else they would be doing, he said many told him they would otherwise be unemployed.

But some watchdog groups point out that the state’s return on investment is very small. And a state Department of Revenue report indicates the film industry only generates 16 cents for every dollar the state forgives in taxes.

All of this comes at a time when the state’s revenues are far below expectations. At the end of the first quarter of the fiscal year that began July 1, the state’s tax collections were $212 million below expectations, according to the state Department of Revenue’s most recent report. That report looks at sales, income, corporate and motor-vehicle taxes.

As a result of the shortfall, DeLeo said, the 2010 budget could end up as high as $600 million out of balance. Watchdog groups on government spending like the Massachusetts Taxpayers Foundation and the Massachusetts Budget and Policy Center say that estimate sounds about right.

And what it means to residents is emergency budget cuts – called 9C cuts – to state services and the local aid that supports municipal budgets. “I wouldn’t be honest to tell them not to be concerned,” DeLeo, a former town selectman, said of local officials. “It’s going to be very difficult.”

With the state’s many support programs under the umbrella of its Health and Human Services Department already spread thin, the House speaker also said municipalities may need to bear the brunt of cuts.

“Every city and town has issues with local aid, Chapter 70 (education funding) and all that,” he said. “But problems with drug abuse and mental illness are out there. There’s only so many places we can cut.”

DeLeo said he won’t support new tax increases that some representatives have pitched to him – including a gas, water and candy tax, and raising the income tax. “I don’t see any appetite at all for further taxation,” he told The Patriot Ledger editorial board as part of a larger discussion of the state’s fiscal crisis.

Film industry gives local businesses a boost
John Hancock signs its name to the state’s film industry tax credits



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