by Jonathan L’Ecuyer
Gloucester Times
March 4, 2010
BOSTON — They came to the Statehouse not to shoot a movie, but to try to save tax credits in Massachusetts.
The Massachusetts Production Coalition (MPC) and hundreds of representatives from film-related businesses and organizations throughout the state — including an Essex selectman — were at the Statehouse yesterday, testifying to the Joint Committee on Revenue that, if a new House bill is passed, it would damage the “burgeoning Massachusetts film industry.”
The committee was hearing a bill sponsored by Rep. Steven D’Amico that would revert the film tax credit back to the original 2006 level, which had a $7 million cap per production and would exclude anyone whose salary tops $1 million from being eligible.
Gov. Deval Patrick has proposed to cap the tax credits at a much higher $50 million a year.
Among those testifying against the bill was Essex Selectman Ray Randall.
“It is likely, if we were to calculate it, that hundreds of thousands of dollars were brought into the town of Essex because of the spending on the movie ‘Grown Ups’ last summer,” Randall said. “When I walked into the Building Center in town one day and asked the clerk there, ‘Have the guys from the movie company come up here?’ he said, ‘They’re here every day, and they spend and they spend and they spend. It has made all the difference in our business, because it looked like it was going to be a very, very slow summer.'”
Beyond spending in local businesses, Randall noted, the producers paid Essex $150,000 to rent out Centennial Grove for the summer. The production also paid for a number of events that would have taken place at the Grove.
“So that $150,000 becomes $250,000,” Randall said. “In addition, they renovated the town’s cottage at Centennial Grove. If the town had had to do that, it would have cost us $80,000. Now you’re up to $325,000, directly to the town.
“Gentlemen, I am happy to tell you that $150,000 of that money went right into Essex’ Stabilization Fund, where it remains until we need it to meet some critical need,” he added.
Randall explained that Essex has avoided overrides of tax-limiting Proposition 21/2 for at least the last four years, and selectmen hope to be able to continue that trend next year.
Estimates from the town’s business community have said the film pumped some $1 million into Essex’ economy, alone.
“To avoid increasing taxes on the backs of our residents is increasingly important,” Randall said. “So this is a gift to Essex to have this movie done here. With this kind of return, we welcome the film industry back to Essex any time, with open arms.”
The MPC estimates that a rollback to 2006 levels would cut local production spending by 80 percent, sending that production spending, together with the jobs and new businesses it creates in Massachusetts, elsewhere.
“Since its inception, the film credit has worked magnificently, and in precisely the way in which it was intended,” said Joe Maiella, president of the MPC. “Tax credits are supposed to create economic activity, and this one has generated $1.07 billion in its first four years, according to the state Department of Revenue. That is an unparalleled success.”
However, D’Amico, a Seekonk Democrat, argues that the cash-strapped state shouldn’t be offering big tax giveaways to help subsidize the film industry.
An independent study by the University of Massachusetts Boston of the total additional impact on the economy that the film sector has created points out that every new dollar of direct production spending in the state generates an additional 95 cents in indirect and induced spending.
The same study also reported that employment in film and television production has increased in Massachusetts during a period when total state employment has been on the decline.
Material from the Associated Press was used in this report by staff writer Jonathan L’Ecuyer, who can be reached at 978-283-7000, x3451 or jlecuyer@gloucestertimes.com.