Jul 20, 2015|
Michael Goodman, Executive Director of the Public Policy Center and Associate Professor of Public Policy at UMass Dartmouth, discusses the film tax credit in the recently passed state budget and whether or not it is good for the state of Massachusetts
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So we will wait to see what what comes of this but again 28 people are dead at this point 100 others injured. There in Turkey. Well the governor signing a 38 billion dollar budget this past weekend. A lot of things in that budget that he was very interested in and there were some things that he did not get for example he wanted to see. The State's film tax credit abolished that didn't happen and it is in that budget our next guest says that it may be time to think over. That film tax credit. Joining us this morning is Michael Goodman and Michael is. The executive director of the public policy center and associate professor of public policy at the University of Massachusetts Dartmouth. But a good to have you with us this morning. It more important to be here so you are up firm believer that maybe this tax credit is not doing what we thought it would do for the state of Massachusetts. I mean I think there is consensus that an active film industry in the state has its state economy and good for jobs. Just think the way it is currently structured. Makes that system and that and doesn't have to wait too expensive. For the state. When he took a careful look at the department of revenue did that what we get so. I think some adjustments sort order especially given how tight the state budget is sent. I'll compelling some of the alternative choices. What we do with that money are. Well let's take a look at the breakdown because I'm not sure people at a glance who don't really understand warned. Recognized. What the state is sacrificing. We made 260 million dollars the state generated that but it. You're saying it cost us some 400 million dollars to generate that 260 million. That's right so that's partner revenue tracks how much money is being spent pretty stacked spread at that includes discounts. That producer is contacts there's an actual refund they're different from the state budget. And so over the course of the history of the program they looked at 20062000. Well we saw about 800 productions. Over billions 600 million dollars in spending. That the real actual new impact on the state economy directly. But about a quarter but billion dollars luck beats fraction of that but got a lot of the zone production expenses. It's stand out of state the import workers they hire center. Contracts. Players and they do you hire lots of local service providers. But when you discount all the out of state activity he had about 260 million dollars of new economic activity for about 400 million dollars tax expenditures so. We're really paying too much. For too little activity. And I think we're making it too easy for producers higher. Are in contract with organizations that are located at that stage the very generous. Deal put these producers and I think we need to tighten up. Which Michael that's how it was sort of sold that we taxpayers the idea that there would be all kinds of jobs associated with it. And in the end not nearly what we were promised. Well Bieber getting jobs I think we're just paying too much of that oh look Motion Picture Association of America. And the deal art came in with pretty similar job creation has to match. It's just when we take a look at the cost side of the equation that this thing looks to be pretty problematic. We or aren't about 400 million dollars in tax revenues and written checks. Part of that is because these tax records are responsible tradable so these producers don't have enough tax liability in the state. Used to credits to basically get a discount on their taxes they can lend sell or trade them to other taxpayers he you have attached built. And so basically cash transferred to the industry. 400 million dollars is a tremendous amount of money to be standing in the environmental last six years or so. For which we passed the program and so it's we can make them not respond to all we can say about. You know 4050 billion dollars a year money that could be better used to divert part of the state such. Well and and you said right off the top that you think that it's not necessarily a tax credit program is in such a bad thing just needs to be yours restructured. And what you just mentioned seems to be one of the real sticking point the fact that they can actually sell these credits to others. Yes I mean it basically what we're doing is. We're helping producers to enhance productions. And we're in an environment where other states are competing even though they're gonna cut back so it's like Louisiana. In Michigan to be sure Hollywood is. Essentially. Using all these different state programs to you know race. All the different state to the pot. See you can perhaps the most generous tax credits so we got this bat we will see last production activity. But we really are serious about building a production industry that's self sufficient Massachusetts. We might want to revisit the way that we target these incentives to promote more local productions. And hiring a local workers and local contractors. So at least we get more bang for our buck. Other states like New York for examples how they structure it. I'm not familiar with the details of the New York program that most states these days have some kind of program to incensed some productions. In many cases the so productions have to be in a given location if you wanna do a story about Austin and you want to work right capped Ian Austen. But in many cases these productions can be anywhere and they essentially are searching the cheapest location and so. We're competition with other states that are essentially trying to sweeten the deal simply a way to get to the producers to make those decisions so. There is a real competition for these productions the real question to the state is how much are we willing to pay to get. Right right well apparently were willing to continue to pay on the same course that we've been since 2006 because it did past. In this budget. Year correct yes yes it is it's still a part of state law lawmakers resisted calls from the governor and think certain objective analysts on both sides of the idol whose call this program. Port used to test it dollars. I think politics are obviously a host of factors these decisions but we're gonna have a public debate about how we wanna spend her resources. Which do so and formed by the aspects available I think the latest department of revenue analysis is the best kind of analysis of this sort of secrecy. Michael Goodman we thank you so much for joining our conversation this morning my. Story. You know you do have to question if it cost you 400 million dollars to make 260 million dollars in revenue. So hoping they urged does it jive I remember being involved in a production and they were talking about the tax credits. And yet those who were trying to decide if Massachusetts was the right place to do this production were salivating over the fact that they could. Actually sell their tax credits. And that is the real draw for a lot of these production houses because they may be don't make. It's not enough to it costs to cover their costs but they can sell it to someone else here for a higher price. And and they make money off of that so as he said this is their way of looking into their production through their tax credits that they get. And then on top the fact that they bring in all of these crews. And all of these these individuals who were working on these these productions from out of state many of incumbent from Los Angeles and coming here. So those are the jobs that we were hoping for that maybe were not getting to the going to be a few more restrictions although I love the fact that they make movie shares it's really cool if Indiana's been on the upswing too lately ultimately I productions and that's fantastic yeah. It's a ton of fun that's for sure two years ago three years ago we had one up where I live on grown ups too was shot and my community in the entire. Some are all those actors every Wednesday again in the community lived there. And shot all of that felt he was a ton of fun but when push came to show what it was all said and done. That the community of swans got marbles and did not make that much money yet there was a lot of sacrifices. You know a lot of infrastructure issues that they ended up impacting. So we didn't really make all that money but it was a great summer. Yes absolutely act or call a few Summers back boss not come used to be located. Across town by the Children's Museum on congress street. New shooting the departed yes on the ball and in they were set up for awhile and that that scene where. What's it what's. What's his and my thinking of she child. Charlie sheen's dad. March issue when Martin Sheen was thrown off the rule yes yes fixed train set up what is giant you know I being. Mattress pray and we saw stuntman just following up the group one after the other. But yeah I was the who's who of a little mobster movies Scorsese drag around town of it's it's it's a fine but at what expanse that question. Confederate flag flap comes to Massachusetts.