As our colleague, Hester Prynne, writes today on her blog:
“This is the eighth year Massachusetts has offered a film tax credit. For the first six of those years (2006-2011, the years for which data is available), the state gave away $327 million in credits. These tax credits attracted $186 million in new spending, which yielded $44 million in new revenue. That is to say, for every dollar we spent on film tax credits, we got back 13 cents and lost 87. One of these days, the fans of the film tax credit must believe, those movie makers are going to flood in here and spend enough money to vindicate the policy. Yes, sure, one of these days.” Read more here…
The report that Prynne cites goes on to say the in all the years the credit has been in place,fewer than 500 net new full time jobs were created at a whopping cost of $128,000 per job — nearly double what the jobs themselves pay on average.
Our friend and tax expert, Peter Enrich from PDM, has editorialized against this wasteful use of taxpayer money. But this is just one egregious example of corporate welfare.
Mass Budget and Policy has described how the state now spends $770 million in special tax breaks for economic development – double the amount spent in 1996. They point out that if the state lost $289 million in FY12 alone over the amount they would have paid if the tax break program had remained the same. Read their full report here.
“A variety of factors influence the decisions made by businesses on where to locate their new or expanding operations. They include the quality of a state’s infrastructure; the skills of its workforce; the proximity to materials and customers; and the overall quality of life available to employees. A particular state’s tax policy – including the variety of tax exemptions, deductions, credits, deferrals and special tax rules geared toward attracting and retaining business (collectively referred to as tax breaks or “tax expenditures”) – also plays a role, though not a primary one. Nevertheless, state governments often focus their economic development strategies heavily on these tax breaks.“
At a time when Massachusetts is struggling to fund the programs we need to make our communities strong – and to address widespread and increasing income inequality, we must end corporate giveaways like the film tax credit.
Good riddance to the Mass. film tax credit - Opinion - The Boston Globe - http://bit.ly/1DYyC6o