At their heyday in 2009, only six U.S. states did not have film incentives. Since then, several have dropped out. Now over one-fourth of U.S. states are not giving handouts for film productions.
As reported by Governing,
Reports from the Massachusetts Department of Revenue show that state taxpayers are ponying up about $118,000 for each job created. As economist Robert Tannenwald, an adjunct lecturer at Brandeis University, wrote in the Boston Globe, the credits “generate too few jobs and too little income for too much money.”
Rather than padding the bank accounts of out-of-state film moguls and movie stars — and the Teamsters Union members who work on movie sets — Gov. Charlie Baker wants to phase out the film tax credits altogether and use the money to increase the earned-income tax credit for 400,000 low-income Massachusetts families.
Controversies over economic development tax incentives are nothing new in Massachusetts. Back in 2011, following a fiasco in which a company called Evergreen Solar filed for bankruptcy and closed its Massachusetts factory after collecting more than $30 million in public grants and tax and lease breaks, state leaders created a commission to look at the incentives. The panel called for fewer and less-generous tax breaks, which it estimated would be responsible in 2013 for a stunning $26 billion in foregone revenue — nearly two-thirds of the current state budget.
I wrote in Carolina Journal in 2013 about a Massachusetts Department of Revenue finding that “From 2006 to 2011, the incentives returned only 13 cents in offsetting revenue for each dollar spent.” It is one of the studies cited in my chart of states’ studies finding low returns on their film incentives programs.