As I’ve pointed out before, the Commonwealth’s movie tax credits program (ie., giveaways) is the biggest ripoff in state spending that we have seen in a long time.
Bruce Mohl, he of Commonwealth magazine, seems to agree.
In an op-ed piece that ran in the Globe he says:
The 25 percent film tax credit is a perfect example. A movie spending $20 million here would receive credits worth $5 million that could be sold to someone who owes taxes in Massachusetts or sold back to the state at 90 cents on the dollar. Either way, the production company walks away with cash that helps defray the cost of the movie.
“It’s free money,” said John Hadity, a former Miramax executive who now runs a New York consulting business that helps studios maximize the tax credits states are showering on them. “Credits have become the math for making films.”
The Revenue Department says 88 productions were either completed or under development in 2006, 2007, and the first two months of this year. The projects are expected to generate direct spending in Massachusetts of $545 million and tax credits worth $138 million. More than a quarter of the credits were generated by payments to big-name stars and directors.
** But, he doesn’t even make it clear. It’s not a “credit” if it’s cash out of the state’s treasury. It’s a “gift”. A credit would be if you paid $20 million in payroll and sales taxes and got $5 million of it, back. What happens instead is, a film company spends $20 million overall (they send in receipts) and gets a check back for between $4.5-$5 million.
Oh, and you should be extremely skeptical of the “direct spending of $545 million …” claim.
We see this sort of financial hi-jinks, all the time.
For example, the Boston Marathon.
The organizers claim this year’s event brought in $112 million in direct and indirect spending.
What do they include in this total?
According to the Greater Boston Convention and Visitors Bureau:
* $72.7 million by the runners and their guests;
* $10 million by spectators;
* $7 million by the Boston Athletic Association, which hosts the marathon;
* $10 million for fund-raising events by runners;
* $750,000 for the U.S. Olympic Women’s Marathon trials April 20;
* $6.3 million toward spring visitor events;
* $5.2 million for four Red Sox games at Fenway Park.
Because hotels would have been empty this weekend, and because the Red Sox wouldn’t have 81 home games this year without the Marathon, right? (And, to include the $10 million in fund-raising by runners, and BAA entrance fees.)
Anyway, a post for another time.
All I’m saying is, this is a waste of state money.
I’m all for generating tax revenue, but to hand out cash to stars just seems unwise.
Did you think they were making movies in Boston because they like our weather???