By Joseph Maiella
March 16, 2010
Representative D’Amico seems to take a dim view of tax credits for any purpose and is not likely to be convinced by cost/benefit numbers—no matter how positive.
Nevertheless, between 2006 and 2009—as reported by the Mass. Department of Revenue—the film credit brought over $1 billion in new business to the Massachusetts economy, an average of approximately $270 million a year.
In that same period, the state paid out approximately $150 million in film tax credits while collecting back nearly $42 million in new taxes. So the actual net cost to taxpayers over the first four years of the program was approximately $108 million—or roughly $27 million per year.
During that same period, the benefit to our state’s economy was 10 times greater than the public cost of the program. In other words, taxpayers paid a dime for every dollar of new business that the credit generated for Massachusetts.
Yet, Rep. D’Amico claims that these new jobs aren’t “permanent,” an assertion that falls flat as so-called “permanent” jobs evaporated while film-related jobs expanded dramatically in Massachusetts despite a steep recession.
He also claims that every new film-related job cost taxpayers $89,755, but on average paid “only” $67,775. He was right about film jobs paying $68,000. But a careful examination of DOR’s four-year totals places the average cost per job at closer to $15,000—rendering his “losing proposition” argument inoperable as well.
Last February, UMASS Boston published an exhaustive study on the Commonwealth’s film industry. Nearly every page of that 18-month, independent, economic impact report is a flat-out refutation of Rep. D’Amico’s basic “race to the bottom” premise.
Indeed, UMASS found that since the tax credit has been in effect, a vibrant, growing Massachusetts film industry has a very bright economic future. Rep. D’Amico seems both unwilling to acknowledge and unable to explain away the groundbreaking work UMASS has done.
If policymakers adopt UMASS’s recommendations on how to better measure film-industry results, they would illustrate that the net cost to-taxpayers is even lower than what we have cited here, and the benefits even greater than previously reported.
The public policy choice remains simple: Doesn’t it make sense to keep a dollar’s worth of new spending and the jobs it creates in the commonwealth for a dime’s worth of investment? Seventy-seven percent of more than 5,000 respondents to a recent WCVB-TV survey plus a unanimous vote of the Legislature’s Joint Committee on Revenue, said “YES” to keeping the Film Tax Credit program in place and “working for Massachusetts.”
Joseph Maiella is President of the Massachusetts Production Coalition.