A showdown, again, over film tax credits    

RYAN HUTTON/ File photo A car burns on Franklin Street near the corner of Essex Street in Lawrence in September 2016 during filming of a scene for a movie about the riots in Detroit in the 1960s.


BOSTON — Supporters of a program that doles out tens of millions of dollars worth of tax credits to Hollywood movie studios each year packed the Statehouse on Tuesday calling on lawmakers to make the subsidy permanent.

They're pushing for approval of a bipartisan proposal, backed by more than 100 lawmakers, that would scrap a Jan. 1, 2023, expiration date on the more than decade-old program. Under the incentive, the state provides tax credits valued at roughly 25 percent of expenses for the production of qualifying movies, TV shows, documentaries and commercials filmed in Massachusetts.

The measure, which would essentially make the tax credits permanent, was heard by the Joint Committee on Revenue on Tuesday, where supporters of the program touted its economic benefit and argued that eliminating the credits will cost jobs and hurt the state's small but thriving movie industry.

Despite criticism that the subsidies are a giveaway to film stars and billionaire studio bosses, supporters say the tax credits are a worthy investment.

"This money isn't just going to the Hollywood stars," Andrea Ajemian, a former Worcester resident and Los Angeles-based film producer, said at a rally ahead of Tuesday's hearing. "We're attracting people from outside the state, we are creating jobs here, and we're pouring money into the communities."

Gary Crossen, general manager at New England Studios, which opened a $35 million state-of-the-art television and production facility in Devens in 2014, told lawmakers the tax breaks have spawned a homegrown film production industry.

"It has created thousands of jobs and resulted in the development of homegrown businesses that are playing a vital role in the Massachusetts economy, delivering well-paying jobs to segments of our population often left behind by incentives given to high-tech, life sciences and other companies," he said.

"Graduates of our colleges and universities who studied film production no longer need to leave our state for L.A., Atlanta or Vancouver," he added.

Locally the proposals have support from a majority of lawmakers representing the North of Boston region including Sens. Bruce Tarr, R-Gloucester, Diana DiZoglio, D-Methuen, and Brendan Crighton, D-Lynn. Other local supporters include Reps. Ann-Margaret Ferrante, D-Gloucester, Linda Campbell, D-Methuen, Tom Walsh, D-Peabody, and Brad Hill, R-Ipswich.

Crighton, a co-sponsor of the Senate bill, dismissed previous reviews by the state Department of Revenue showing the tax breaks don't pay for themselves.

"They can produce as many studies as they want over at DOR saying this is not a smart investment, but we know on a ground level that it works," he said.

The battle over the film tax credits has become an annual event on Beacon Hill, as supporters and opponents have sought to scale back, eliminate or expand the subsidies.

Gov. Charlie Baker, a Republican, pushed to scrap or scale back the subsidies during his first term, arguing that the costly tax credit program does little for the economy. His efforts were blocked by the Democratic-controlled Legislature.

The film tax credit provides a subsidy equal to 25 percent of production costs including set construction, wages, security, food, gas, lodging and other expenses for the cast and crew. That means a film studio that spends $10 million in Massachusetts is eligible to get a tax credit worth $2.5 million — even if that business paid little or no taxes here.

Since 2006, the state has doled out at least $550 million in credits for Hollywood hits like "The Town," "Ted" and, more recently, "Godzilla: King of the Monsters,” where monsters battled each other at Fenway Park with the Boston skyline as a backdrop.

There is no cap on the tax credits, which can be "carried forward" up to five years, sold or transferred to another production studio, or even cashed in, according to the state.

In order to qualify, production costs for a film must exceed $50,000 within a year. Studios can even get an exemption from the state's 6.25 percent sales taxes to offset costs.

In 2017, the latest year for which figures are available, the state paid more than $23 million in tax credits to 118 productions, according to the Department of Revenue.

In the previous year, the state doled out nearly $89 million to 100 productions including "Patriots Day.”

Supporters of the tax credits say they've resulted in more than 230 productions being filmed in at least 220 communities, spending more than $2.4 billion.

Those films have created about 15,500 new jobs with an average salary of $67,000, 70% of which went to state residents, according to the Massachusetts Production Coalition.

Revenue officials acknowledge the credits have created employment, but say the average cost to the state is about $125,000 per job.

Fiscal watchdogs argue that Massachusetts' film tax credit is one of the most generous in the country and should be scaled back or allowed to expire.

Scrapping the tax program would free up more money for education, transportation and other needs, they argue.

At Tuesday's hearing, lawmakers also heard from supporters of bills that seek to scale back the tax credits or eliminate them altogether.

One proposal, filed by Rep. Angelo Scaccia, D-Readville, would cap the tax credits at $40 million a year and prevent movie studios from selling or transferring the credits.

"Thee cost of these tax credits far outweighs the benefits," said Charlie Chieppo, a senior fellow at the Pioneer Institute, a Boston-based think tank. "We're paying well over $100,000 for every job we create, some of these jobs last for a weekend, and most of the money goes to people from out of the state."

Christian M. Wade covers the Massachusetts Statehouse for North of Boston Media Group’s newspapers and websites. Email him at cwade@cnhi.com.

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