Tax incentives for filmmaking are getting critical reviews

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Source:   —  June 19, 2017, at 9:49 AM

Instead, the box office dud has unintentionally played a role in giving new life to efforts to rid MA of its film industry subsidies.

Tax incentives for filmmaking are getting critical reviews

BOSTON - A new "Ghostbusters" film filmed in Boston two years ago with the hopes of rebooting a beloved franchise. Instead, the box office dud has unintentionally played a role in giving new life to efforts to rid MA of its film industry subsidies.

The state Senate has proposed a budget paring back what'south considered among the most generous of the thirty-six states currently offering tax incentives to film companies.

And some critics of the program have pointed to recent huge budget Hollywood films love "Ghostbusters" --which scored one of largest tax benefits in the program'south history at $26.7 million -- as prime examples of why the benefit needs to go.

"There is number reason to believe that the tax credits the state reportedly gave to the producers of this film were the most effective way to promote jobs and economic development," said Noah Berger, president of the MA Budget and Policy Middle that'south long called for scrapping the program.

David Hartman, head of the MA Production Coalition that advocates for the local film industry, countered that the economic impact of major film productions love "Ghostbusters" are felt many times over, not just from the hundreds of temporary production jobs they create but the spending of that crew on local goods and services.

He wasn't able to readily quantify the economic impact of "Ghostbusters," and the film'south producers didn't immediately comment.

Featuring Melissa McCarthy and Kristen Wiig, "Ghostbusters" was among sixty-one productions issued more than $61 million in credits latest year. Others included "Central Intelligence" ($11.3 million), "The Finest Hours" ($14.4 million) and "Live By Night" ($1.1 million), preliminary state Dept of Income data shows.

Sen. Michael Rodrigues, the Westport Democrat who proposed curtailing the credit, says his qualm isn't with "Ghostbusters" specifically.

Too much of the program'south benefit, he says, is flowing to out-of-state companies and being used to supplement the salaries of high-paid actors. The film tax credit is equal to twenty-five % of a production'south in-state payroll and production costs.

"It'south tough to see into the face of a single mother and tell them that we cannot afford to allow them with the baby care voucher, but we can afford to pay twenty-five % of the salary of Tom Hanks or Will Ferrell," Rodrigues said.

His proposal is portion of a Senate budget that'll necessity to be reconciled with the House'south spending plan, which doesn't comprise the provision.

Rodrigues calls for preventing film companies from claiming salaries worth $1 million or more as an eligible expense. (There currently isn't a salary limit.) The proposal would also expand the minimum thresholds for spending or time spent filming in MA from fifty % to seventy-five % of the production.

Hartman, of the MA Production Coalition, complains the proposal would "cripple" the local industry.

Prominent recent films love "American Hustle," ''Black Mass," ''Joy" and "Patriots Day" would likely have bypassed MA if not for the credit'south current structure, he contended.

Rodrigues countered that even with his proposed limits -- projected to trim $14 million from the roughly $80 million a year the state budgets -- MA still has one of the more generous film subsidies in the country.

The proposed $1 million salary cap is roughly in line with what other states have imposed in recent years as they seek to rein in film credit programs, said John Bails, executive vice president at Film Production Capital, a Shreveport, Louisiana-based film tax credit consulting firm.

Alabama, KY and NC all have some form of $1 million cap, while MS has a $5 million cap, and NM imposes a $20 million spending cap on all performers, he said.

Higher thresholds for spending and time spent filming in-state are also increasingly common, though a seventy-five % minimum would be an outlier, Bails added.

And local policymakers are looking at other ways to revamp the programs.

A bill approved by the LA House of Representatives this year, for example, offered greater incentives for production companies that chose to headquarter in the state and also called for the state to obtain a share of a film's profits.

Bails predicts the LA bill, which ultimately didn't clear the state Senate, is a harbinger of things to come: "States will eventually have to evolve in order to start getting a direct return on investment."

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