Movie Studios: Boston is the new Hollywood.

It's going to be approximately $60 million per year, for five years.

From Rep. D'Amico's website:

H-4784 would provide developers with a tax credits worth up to 20% of the cost of construction for sound stages (including offices and parking facilities); digital media or post-production facilities (e.g. special effects houses); and the purchase or rental of
equipment such as cameras, lighting and computers. As with production credits, these
could be sold to other businesses or wealthy individuals.

Credits would be available for a five-year period and would be capped at $60 million per year. Our potential liability would be $300 million.
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I actually think this would be great for our region, bringing in a whole new industry. Again and again I read on this forum people saying that this city needs some kind of diversified dynamic to it or just be more edgy/urban. This would add a whole new class or should I say character of people. Which I think the majority would be the type that want to live in the city. Nightlife would grow, residential would grow and the number of creative jobs would grow significantly. I think in the long run it's worth it.
 
It's definitely worth it. Brings more job, more people into the city and help it grow, not just Boston, but the surrounding cities too.
 
Then please send your donations to:

Tom Cruise
c/o Paramount Pictures
5555 Melrose Ave
Los Angeles, CA 90038

There has never been a giveaway of any magnitude close to what the film industry is getting, nor should there be.

The credits that Fidelity and JP Morgan have received are in the seven figures. The giveaways to the film industry are in the nine figures.

A tragedy.
 
Sorry, but I think you're being unnecessarily negative here, if not downright disingenuous. The addition of a film industry to our area will only benefit us all. We NEED Jobs, we need new investment, and we need new people. These additions will contribute to a higher quality of life for everyone who calls Boston home, even if we only get the intangibles.

Why is North Carolina getting a new APPLE data Center? It's because THAT STATE KNOWS HOW TO PLAY BALL. We need to learn how to play HARDBALL!
 
I'm don't know the specifics and details of how the money and taxes work with Major League Baseball but it seems like the city puts up a lot of sacrifices to be part of that industry and look how that has turned out for us. Not sure where I'm going with this but I think there are parallels. The film industry has always had this baggage, but it's still an industry and could do alot if it catches on in Boston.
 
Yesterday I saw a hearing of sorts I guess on this project aired on the local channel from I believe the statehouse(only caught part of it). Project looks pretty nice... Interestingly, when they opened it up to questions.... There weren't any!
 
JohnAKeith said:
Then please send your donations to:

Tom Cruise
c/o Paramount Pictures
5555 Melrose Ave
Los Angeles, CA 90038

There has never been a giveaway of any magnitude close to what the film industry is getting, nor should there be.

The credits that Fidelity and JP Morgan have received are in the seven figures. The giveaways to the film industry are in the nine figures.

A tragedy.
Click to expand...

I think this is meant as a joke. It's certainly not based in any reality. Ask the ten other states that offer tax breaks for TV and film production if they think it's been worth while. They would say yes. Louisiana is stumbling over themselves to build full production and studio facilities to serve their numerous productions and keep them from moving to other states. Investors, usually oil people in LA, line up to avail themselves of the break.

The Cafornia legislature, after years of rebuffing tax-break requests from the film industry, is finally pushing a bill through to keep production from fleeing the state. They realize what the state has been losing.

Canada is reeling with the loss of production due to the exchange rate making their break almost meaningless, especially when compared to breaks in nearby states south of the border.

Film and TV production does not polute, brings high wages to local crafts people, pumps infusions of cash to small area businesses - and it promotes the area without us paying a penny.

Sure, Tom Cruise is over-paid. And, personally, I can take him or leave him. But having a capable full-service production facilty in our realm is a good thing.

We will never be Hollywood - thank God - but why not diversify any way we can?
 
Film Perks May Be Shortchanging the State

Patrick aides divided over long-term benefits of tax breaks
By Frank Phillips
Globe Staff / July 4, 2009

More than three years into a state program that awards lucrative tax incentives to lure filmmakers to Massachusetts, a new report by Governor Deval Patrick?s administration concludes that taxpayers are not getting their money?s worth.

The report, which the state Department of Revenue released yesterday, says that Massachusetts is getting only 16 cents for every dollar the state spends on the incentives, and that much of the benefits from the program are going to out-of-state companies and workers.

Enacted in 2005, the program effectively underwrites a quarter of filmmakers? production costs, in hopes that the movie industry will in turn hire Massachusetts workers and generate economic activity in the state. But the report indicates that many of the jobs are temporary, and that the state isn?t getting anywhere near its money back on its investment.

The state handed out about $166 million worth of tax credits to 267 projects from 2006 through 2008, according to the report. The state is set to spend nearly $100 million more on 30 projects in the works, the report says.

The tax program has fueled a debate - and one with serious political implications - within Patrick?s administration over whether the tax credits are wasting taxpayer money or planting the seeds for future economic growth.

Critics say the incentives give huge tax breaks to wealthy Hollywood moguls and movie stars who hardly need the help. But the program has support from powerful Beacon Hill lawmakers, including Senate President Therese Murray and House assistant majority leader Ronald Mariano, both of whom are hoping to bring large, permanent soundstages to their districts. The projects together would cost close to $600 million, but their construction hinges on the continuation of the film tax credit program, Murray and Mariano say.

?This is like the seeding,?? Murray said. ?You have to look at the bigger picture.??

But critics, citing other states? experiences, have seized on the report, saying it confirms their fears that Massachusetts is giving away money at a time of fiscal crisis, when vital services are being cut.

Peter D. Enrich, a Northeastern University law professor who specializes in tax incentives, said Massachusetts has joined a self-defeating national competition among other states.

?We are essentially becoming co-producers with the Hollywood moguls,?? said Enrich, a former top official in the Dukakis administration.

What direction Patrick will take is not clear.

His top fiscal adviser, Leslie Kirwan, the secretary of administration and finance, who oversees the Revenue Department, is pointing to the agency?s findings to raise questions about the benefits of the tax credits, according to administration officials.

But Patrick?s economic development staff counter that the incentives have helped generate hundreds of millions of dollars in economic activity, and will help create a vibrant, permanent film industry.

?It?s wrong to ask whether it?s worth it based only on short-term results,?? said Gregory Bialecki, the secretary of economic affairs. ?The right question is, is it a better long-term investment???

The debate among Patrick?s aides has created unease among those hoping to see a film industry gain a foothold in the Massachusetts economy.

?We?re getting a mixed message from the administration,?? said Mariano, a Quincy Democrat who is trying to persuade investors to build studio facilities at the former South Weymouth naval air station. ?The fiscal folks are telling the governor one thing, and the development people are talking very differently.??

Last month, Mariano and other lawmakers prevailed upon Patrick to back off his push to cap, at $2 million, the amount of salary that qualifies for the tax credit. Hanging in the balance, according to lawmakers, was production of a Tom Cruise-Cameron Diaz movie, ?Wichita,?? which is set to starting filming here. The movie is poised to be the biggest film ever shot in Massachusetts.

For the governor, the debate carries political implications, in part because of the interest that Mariano and Murray have in the construction of film studios in their districts.

Patrick?s relationship with Murray, which has been fragile at best, was recently strained further when the administration last month rejected a request by Plymouth Rock Studios for a $50 million bonding subsidy for road, water, and sewer construction. The Plymouth studio is looking to build a $400-million complex and says it will eventually create as many as 4,000 jobs.

Murray has voiced support for the investors in her hometown. Her top political adviser, Kevin O?Reilly, this year took a job as Plymouth Rock?s vice president for government affairs. For the past year, he had been a consultant to both her campaign committee and the investors.

The controversy over the tax breaks reflects what is happening around the country. States are in a fierce competition to lure movie producers; some are enhancing their credits in efforts to outbid one another.

?It?s an absurd race to the bottom, and one which we can?t win,?? said Representative Steven J. D?Amico, a Democrat from Seekonk. ?They are a Trojan horse that backs us into a permanent entitlement for a highly profitable industry.??

Michael Widmer, president of the Massachusetts Taxpayers Foundation, a business-funded watchdog group, added, ?The Hollywood stars and famous directors come to town and the normal critical eye given most credits goes by the boards."

Link
 
nm88 - the above story from the Globe obviously contradicts every point you make in your post. Will you be retracting it, now?
 
meanwhile, fidelity is moving 450 jobs to rhode island....
 
JohnAKeith said:
nm88 - the above story from the Globe obviously contradicts every point you make in your post. Will you be retracting it, now?
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.

I hope he doesn't feel compelled to retract a damn thing. Some people obviously have agenda that allow them to see only the negative side of issues instead of working positively to make things work. What I saw in the Globe story was some negatively infused opinions, NOT a contradiction of every point made by nm88.....and as far as Fidelity goes, they have had a very poor sense of loyalty for some time now.
 
More on the film credit handout program:

Most film tax credit spending goes to nonresidents - By Bruce Mohl, CommonWealth Unbound

The Massachusetts film tax credit induced movie and TV producers to spend $676 million here over the last three years, but more than half of the money went to people who live outside the state, according to a long-delayed Revenue Department report.

The report said the tax credit attracted productions that paid a total of $429 million in wages to 1,876 people. Massachusetts residents held roughly 40 percent of the jobs but received only 18 percent of the wages. Nonresidents pocketed the bulk of the money, with 37 actors, directors, and producers receiving $177 million, or 41 percent of the total.

The Patrick administration had been sitting on the report for more than a month. It was released just before the July 4 holiday during the same week that the Patrick administration flip-flopped on an effort to reduce the state's film tax credit exposure. The budget signed by the governor on Monday included a provision capping at $2 million the amount of a star's salary that would be eligible for the 25 percent film tax credit. That provision was repealed after lawmakers, as well as producers of a big budget Tom Cruise movie coming to Massachusetts in the fall, complained about the change and how it was rushed through the Legislature with no debate. For details, go here.

CommonWealth reported yesterday that the Patrick administration is split on the film tax credit. Greg Bialecki, the state's secretary of housing and economic development, says he is hopeful that the tax credit will help Massachusetts grow a domestic film industry. Leslie Kirwan, the governor's secretary of administation and finance, is reportedly worried about the rising cost of the tax credit and its anemic job production for Massachusetts residents.

The Revenue Department report issued today reflects the split inside the administration; it is written in a just-the-facts manner with lots of facts and figures but little interpretation.

According to the report, the film tax credit boosted state gross domestic product by $511 million and boosted overall employment (film and other business sectors that cater to the film industry) by 3,177 jobs over the three-year period at relatively little cost to the state because most of the tax credits the state has issued have not been redeemed yet.

The Revenue Department said $167 million in tax credits were issued over the three-year period but only $22 million have been used so far. The film tax credit is unusual in that it doesn't just reduce the amount of taxes a taxpayer owes. The film tax credit is refundable, meaning someone with no Massachusetts tax liability can convert it into cash by selling it back to the state or to a third party like a bank or insurance company. The bank of insurance company can then use the tax credit to reduce its tax exposure.

The cost to the state from the film tax credit is expected to rise significantly in coming years -- roughly $125 million in tax credits are expected to be redeemed in the fiscal year that just ended and $112 million in the current fiscal year.

Overall, the report said, the state is taking in roughly 14 to 16 cents in tax revenue (primarlily income tax revenue because movie productions are exempted from the state sales tax) for every $1 in tax credits that are issued. The Revenue Department cited studies on the film tax credits of other states that indicated returns were 7 cents for every dollar in tax credits issued in Connecticut, 13 cents in Louisiana, 28 cents in Rhode Island, 94 cents in New Mexico, and $1.10 in New York. The Revenue Department said the much higher returns reported for New Mexico and New York should be ignored because they were the result of questionable study methodologies.

Of the $676 million spent by TV and movie producers here over the last three years, the Revenue Department report said roughly $45 million would have been spent anyway without the tax credit. In essence, the state paid more than $11 million in tax credits to companies like WGBH-TV (Channel 2) that would have spent money to produce TV shows here anyway.

Proponents of the state's film tax credit have suggested it would boost tourism in Massachusetts, but the Revenue Department study said tourism benefits would be difficult to calculate. The report said 10 feature films were shot in Massachusetts from 2006 through 2008 but only four -- "The Game Plan," "Gone Baby Gone," "My Best Friend's Girl," and "21" -- were actually set in the state. Of the remaining six films, two were set in New York ("The Women" and "Bride Wars"), one was set in New Jersey ("Paul Blart: Mall Cop"), one was set in Newport, R.I. ("Ghosts of Girlfriends Past"), one was set in Paris ("Pink Panther II") and one was set in New York and Alaska ("The Proposal").
 
More on the film credit handout program:

Most film tax credit spending goes to nonresidents - By Bruce Mohl, CommonWealth Unbound

The Massachusetts film tax credit induced movie and TV producers to spend $676 million here over the last three years, but more than half of the money went to people who live outside the state, according to a long-delayed Revenue Department report.

The report said the tax credit attracted productions that paid a total of $429 million in wages to 1,876 people. Massachusetts residents held roughly 40 percent of the jobs but received only 18 percent of the wages. Nonresidents pocketed the bulk of the money, with 37 actors, directors, and producers receiving $177 million, or 41 percent of the total.
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This is not a surprise. These are the exactly the types of jobs that Massachusetts residents have no experience with because the industry does not exist here. If the movie and film industry were to build in this state, you see a lot more Mass residents with these job titles that pay the bigger salaries. It's pretty much common sense.
 
Why should my tax money go to pay other people's salaries? There are plenty of industries here that ask for nothing in return. Also, plenty of industries that would come here without asking for handouts.

Oh, wait, there's Dane Cook! I changed my mind!
 
Perhaps my logic is flawed.

If there was no movie or TV production in the state, there would be no spending by the production companies, and thus no tax credit offered.

Net result: zero spending, zero revenue to from such spending, and no loss to the state coffers from offering a tax credit.

Otherwise known as cutting off one's nose to spite one's self.

That's a winner.

But perhaps my logic is flawed.
 
JohnAKeith said:
IT IS NOT A TAX CREDIT IT IS STATE REVENUE!
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If the movie companies are not filming in Massachusetts, they are not spending any money in Massachusetts, and there is zero state revenue that flows from their [non-existent in MA] production expenditures.
 
So, what I'm getting out this discussion is that this seems to be a gamble on the state's part. They put out x dollars up front in hopes that it will return >x dollars in future revenue (spending & employment by production companies, increased tourism, etc)

Unfortunately it is difficult, if not impossible, to determine exactly how much future revenue is affected by the production companies, thus making this a he said/she said argument.

Is that about right?
 
statler said:
So, what I'm getting out this discussion is that this seems to be a gamble on the state's part. They put out x dollars up front in hopes that it will return >x dollars in future revenue (spending & employment by production companies, increased tourism, etc)

Unfortunately it is difficult, if not impossible, to determine exactly how much future revenue is affected by the production companies, thus making this a he said/she said argument.

Is that about right?
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A tax credit is after-the-fact. One first has to spend money. Let's say Universal pays a salary to a film's director, the film, or most of it, being shot in Massachusetts. The director subsequently has to file a Massachusetts tax return reporting the income he or she received while filming in Massachusetts, and, in that tax return, the director gets to claim a credit (a reduction in the amount of tax otherwise owed). The credit reduces the amount of tax revenue that otherwise would be received by Massachusetts.

If Universal chose instead to film in CT, or VT, then the director would not file an income tax return for Massachusetts, and thus the state would see zero tax revenue as a result of the film's production.

Basically, three cases:

A. If a film is shot in another state, zero tax revenue to Massachusetts.

B. If a film is shot in Massachusetts and Massachusetts provides a tax credit for shooting the film in Massachusetts, tax revenue to MA is x minus y (y = amount of the credit).

C. If a film is shot in Massachusetts and Massachusetts provides no tax credit for shooting a film in Massachusetts, tax revenue to MA is x.

The calculation (and conversation) should be how much more tax revenue does MA gain through B. by diverting films that otherwise would be filmed in A to Massachusetts.

With regard to C., the number of films that can only be shot in Massachusetts (locale mainly) is very finite. So hypothetically, if C. is 1-2 films a year, and B. is 7-8 films a year, what is the difference in revenue received by the state from B. and from C., and that, to me, is whether the credit is valuable or not. If B. and C. generate the same number of films per year, then B. (and the credit) is not worth having.
_________________

DC recently did something different. It has gone and up-front financed some of the production costs (in exchange for a month's worth of filming in DC) for an untitled movie starring Owen Wilson, Jack Nicholson, Reese Witherspoon. It did so using an economic development grant. I don't know whether DC now gets a share of the profits, if any. In doing so, DC was able to shift the shooting from Massachusetts to DC. Unlike most movies filmed in DC, this movie did not require backdrop scenes of the Capitol, the Pentagon, etc., which are unique and allow DC to compete for movies with relying on tax credits.
 
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