Giorgio: Charlie Baker is Wrong on the Film Tax Credit

Wednesday, March 18, 2015

Paul Giorgio, GoLocalWorcester MINDSETTER™

Paul Giorgio

Governor Charlie Baker is wrong on his plan to eliminate the tax credit for the film industry in Massachusetts. Currently the film tax credit allows anyone who spends at least $50,000 to take some tax deductions. The major one is the sales tax exemption. There is also a 25% production credit and a 25% payroll tax credit.

Because of this tax policy, Massachusetts has become Hollywood East, with numerous movies being filmed here each year. Major movies such as The Departed, Shutter Island, American Hustle and Sea of Trees have all been shot here in the past three years. These tax credits create good jobs and stimulate the creative economy in our state. Since its inception there have been about 100 movies filmed in the Commonwealth.

Worcester has benefited.

The City of Worcester has been a major beneficiary of Hollywood’s desire to film in the state.

We have had two major films shot almost exclusively in Worcester and about a half dozen other major pictures filming scenes here. American Hustle, was filmed extensively in the city, while the yet to be released Sea of Trees starring Matthew McConney spent almost 2 moths shooting both in Worcester and at Sutton’s Purgatory Chasm.

I saw firsthand the number of jobs these movies create. They filmed for over a week in my neighborhood. Local businesses such as Imeadia Sound benefited, since they rent a great deal of equipment to the production companies. Westerman’s restaurant Supply Company benefited-they now have a prop warehouse. About a hundred local extras were hired for both movies.

This in addition to hotel rooms that were booked in the area, food that was purchased and the union jobs these movies create.

There are also other benefits that can’t be quantified. These include the psychic benefits that local residents enjoy realizing the Hollywood has discovered there town. There is also promotional value related to the filming of a movie. A city is hip if it is discovered by Hollywood.

It appears that based on the tax credit bill a sound stage was built in Devan’s, Massachusetts and there was some talk of building one in Worcester. If the tax credits are eliminated those jobs will disappear as the movie industry discovers another state or stays in California.

$261 million spent on movie productions.

According to a study done by the Massachusetts Department of Revenue, the tax credit has cost the state $80 million. That is a big number, but if we did not have the credit, it is likely that very few films will be shot here. The other side of that coin is that in 2012, $68 million was spent creating 700 full time jobs. Between 2006 and 2012, $261 million was spent in the Bay Sate by Hollywood production companies.

What is the money spent on?

What does that money get spent on? As I stated before, they spend it on extras for movies and I know several people who have worked in several movies. They spend it on food bought from local restaurants. They spend it on local hotels. If they are building as set, they need material, which they buy locally.

I remember one weekend a couple of summers ago, when there were 2 movies and a Network pilot being filmed in Worcester at the same time.

I think there is a way for the Governor to get some savings without hurting the emerging Massachusetts movie industry.

Change the law, don’t eliminate it.

As the bill is currently structured, if a production company spends at least $50,000 they are entitled to the tax credit. Let’s up the limits, so that we attract major movies, which will spend upwards of $20 million on a production and create jobs in the Bay State. Let’s keep the whales and let the minnows go someplace else.

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