Mass Film Office (Ppt) Feb 22 2010

FILM TAX CREDITS Are they worth it? mafilm.org

HOW DO THEY WORK?
The state of Massachusetts, since 2006, has offered filmmakers a quarter in the form of a tax credit, for every new dollar brought into our state’s economy.
PROVIDED THAT…

Filmmakers must first spend their money here--and pay state taxes on that spending -- before they can receive a single credit.
WHAT DOES THIS MEAN?

It means the actual cost to taxpayers is about a dime for every new dollar brought to our state’s economy.
HOW DO WE KNOW THAT?

Because we’ve already had four years of experience with the film tax credit, which has been well documented by the Massachusetts Department of Revenue (DOR). Their latest report was issued in 2009.
HERE IS WHAT THAT REPORT SAID…

2006 to 2009
COST TO TAXPAYERS:
$108 million
$149 million in redeemed credits, minus
$41 million in new taxes collected*
BENEFIT TO ECONOMY:
$1.069 billion
Total new direct spending in Mass**
*MA DEPT OF REVENUE REPORT ON FILM TAX CREDITS – July 2009 (page 5)
(Includes estimated tax collection for 2009 based on DOR’s 2008 totals.)
**MA DEPT OF REVENUE REPORT ON FILM TAX CREDITS – July 2009 (page 8)

Cost/Benefit (in $ millions)

THE “RIPPLE EFFECT”
As the 2010 UMASS study pointed out, every new dollar of direct production spending in Massachusetts generates an additional 95 cents in “indirect” and “induced” spending.
The state collects taxes on that additional spending as well.

When indirect spending (and the taxes it generates) is factored in, the cost to taxpayers is even less.

AND WHO EXACTLY IS BUYING THESE CREDITS?
Massachusetts taxpayers!
Local businesses and individuals
are pouring the savings they earn from purchasing film tax credits right back into our local economy.

UMASS STUDY*
While overall employment in Mass declined, film production jobs increased.
Film job growth helped offset losses in other sectors like construction & trades.
Mass is among the fastest growing states in the country for film production.
*Source: Umass Feb 2010 report on MA film industry (Page 3).

“ The film credit has been a success. It is plainly worth the money.”
Boston Globe Editorial, February 14, 2010
“ Any way you slice it the effort to boost film production in Massachusetts has been a win for businesses and taxpayers.”
--Boston Herald Editorial, February 12, 2010
“ It would be foolish, not to mention expensive, to drive that activity to other states.”
--Lawrence Eagle Tribune Editorial, February 17, 2010

“ Jobs and private-sector economic activity are what the state desperately needs. The film "Grown Ups" injected an estimated $1 million or more into the Essex private-sector economy.”
-- Gloucester Daily Times Editorial, February 19, 2010
“ Just in the past couple of years, the local area has hosted several movie projects including "Bride Wars," "The Proposal," and "The Company Men.”
--Salem News Editorial. February 19, 2010
“ Since the Legislature adopted a film tax credit in 2005, employment in the film industry has risen 33 percent, the largest percentage growth of any state during that time period.
--Lowell Sun, February 12, 2010

“ According to the DOR report, between 2006 and 2009, direct new spending in the state as a result of movie production topped an estimated $1 billion.”
--Boston Business Journal, January 15, 2010
“ That’s a huge infusion into the local economy over four years, and does not count hundreds of millions in additional indirect spending as well. Over the same period, these productions have also created thousands of jobs.”
--Banker and Tradesman, February 7, 2010

In the credit’s first 3 years…
Direct employment on films is up 537% *
Median annualized film salary is: $67,750 *
Union membership has more than doubled **
Total wages earned in MA are up 1000% **
* Source: Mass Dept of Revenue Report, July 2009 (pages 13 & 17)
** Source: IATSE Local 481 Woburn, Massachusetts

Not just actors, but also:
Carpenters, painters, electricians, hairdressers, truck drivers, caterers, crane operators, make-up artists, accountants, designers, decorators, chiropractors, florists, cabbies, limo drivers, audio/visual technicians, digital effects specialists, and many others…

*SOURCE: US BUREAU OF LABOR STATISTICS (2006 to 2008) Overall Job Growth in MA*

Film-Related Job Growth in MA* *SOURCE: Mass Dept of Revenue Report on Film Tax Credits – July 2009 (page 17)

Before the credit, only a fraction of each movie budget was actually spent in Massachusetts.

PERFECT STORM

MYSTIC RIVER

THE DEPARTED

Since the credit, productions spend a much larger piece of their production budgets in Massachusetts.

GONE BABY GONE

GAME PLAN

BEFORE THE CREDIT:
10 major films over
7 years.
$67 million
for Massachusetts.

AFTER THE CREDIT:
38 major films in
4 years.
$1.069 Billion
for Massachusetts.*
*Source: Massachusetts Department of Revenue – July 2009 (page 8).

That billion dollars has also helped cities, towns, across the state: Andover, Burlington, Gloucester, Haverhill, Hull, Lawrence, Lenox, Lowell, Medfield, Plymouth, Rockport, Salem, Taunton, Woburn, and Worcester —just to name a few.

EXAMPLES FROM 2009 : The film “Grown Ups” paid $150,000 to the Town of Essex, plus an additional $100,000 to renovate a town-owned cottage--which helped local taxpayers avoid a prop 2 ½ override. The producers of “Zookeeper” paid $350,000 to the Franklin Park Zoo for the time they spent shooting there--which helped ease the sting of state budget cutbacks that year.

STILL, SOME MYTHS PERSIST.

TRUE OR FALSE?
Big Hollywood stars
are getting a tax break.

FALSE
BIG STARS ARE REQUIRED TO PAY 100% OF ALL MASS INCOME TAXES DUE ON THEIR SALARIES.
ALSO, THEY MUST PAY MASS TAXES ON ALL THEIR RESIDUAL INCOME FOR YEARS TO COME.

TRUE OR FALSE?
Most of the jobs
are going to
non-residents.

FALSE
62% OF ALL NEW JOBS CREATED WENT TO MASS RESIDENTS.
DOR ALSO PREDICTED THAT THIS PERCENTAGE WOULD INCREASE AS THE LOCAL INDUSTRY MATURES.*
*Source: Mass Dept of Revenue Report, July 2009 (Pages 13 & 17).

TRUE OR FALSE?
Taxpayers believe the
credit is a bad deal for Massachusetts.

64% of Bay Staters think film tax credits are good for the economy . --Channel7/Suffolk University Poll September 27, 2009 FALSE

MASSACHUSETTS NOW IN “TOP TEN” IN US FOR FILM PRODUCTION*
*MovieMaker Magazine – January 21, 2010
*Los Angeles Daily Journal – May 26, 2009
*Motion Picture Assoc of America - April 2009
*Production Update (P3) Magazine - Dec 2008
*Production Update (P3) Magazine - July 2007

Mass Film Office (Ppt) Feb 22 2010

by Mass Film Office on Feb 22, 2010

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Mass Film Office (Ppt) Feb 22 2010 — Presentation Transcript

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