Giving Credits where Credits Are Due? Massachusetts’ Film Tax Incentive Program Respun

Best Place. Best Crews. Best Films., exults the Massachusetts Film Office , the state-run marketing outfit charged with enticing film makers to make movies and TV shows in the Bay State. In recent years, Massachusetts has hosted The Social Network, The Fighter, Shutter Island, soon to-be-released Moneyball, and other big-time productions.  Since 2007, the agency has set down cat nip for filmmakers via a tax credit equal to 25% of a film’s production and employment costs. In this, Massachusetts has company. Since Louisiana rolled out the practice in 2002, 15 states have jumped into incentiveville.

In talking up the tax credit program, it’s only natural for the Film Office to follow film songster Harold Arlen’s lead:  Accentuate the Positive. That it does by emphasizing the broadest-brush yardsticks like benefit to the economy (e.g, gross revenues) and jobs created in Massachusetts (also with grossed-up spin).

Drilling Down.  For relief, Wig & Pen turned to the Massachusetts Department of Revenue’s annual state-required reckoning, A Report on the Massachusetts Film Industry Tax Incentives. Released in January 2011, it covers calendar year 2009.  Here’s how the study parsed calendar year 2009’s $329.7 million in gross revenues from the Bay State’s film industry.

First, the report deducts $10.7 million in revenues that it estimates would have occurred without the tax credit program. Then, from the new total of $319 million it pares a whopping $215.2 million, reducing revenues to $103.8 million. The $215.2 million covers payments to film industry employees and businesses outside the state--$82 million of which went to $1 million and greater salaries for Hollywood actors.   

Finally, in step with the state’s requirement to balance its budget, the Department of Revenue subtracted state budget cuts needed to offset its film tax incentive expenditures.  That brought the direct economic impact of the program to $32.6 million.

In fairness to accentuators of positivity, the Department as part of the same exercise also modeled multiplier effects on the broader economy. That kicked in an additional $165.5 million in gross domestic product and personal income of $25.2 million.

Better, Not Best. So judging from Department of Revenue results, the tax incentive program was a force for economic good, but way less compelling than some might have us believe. Our lesson: even agreed-upon on gross economic indicators can mask as well as illuminate. It’s always a good idea to drill down, especially when special interests—inside and outside of government—have motive and opportunity.

Read The Economist's take (i.e., rant) on the use and abuse of film tax credits.
 

The Young Adult Brain in Action! Tales from the Amherst, Massachusetts Police Blotter:*

A Bonnie & Clyde Bank Heist, Amherst Style. In April, a young middle class couple, William Oldershaw, 24, of Sunderland and Shayna Henckel-Miller, 19, of Amherst allegedly conspired to rob Amherst’s highest-profile bank, The Bank of America. Oldershaw walked into the bank weaponless with a note that Henkel-Miller allegedly had helped him write, and handed it to a teller, who presented him with $249. He then exited the bank, where his accomplice waited in the escape vehicle—a TAXI CAB, which the police intercepted several miles down the road. An official at the BOA told Wig & Pen that both suspects had accounts at the bank.

Oldershaw’s Hedge. According to Amherst Police detective David Foster, Oldershaw believed that his request for $249 would yield less legal trouble [should something possibly go wrong]. If you steal $250 or more in Massachusetts, you can go to state prison for five years; If you keep the tab below $250, your maximum sentence is a year in a county jail. Unfortunately for Oldershaw, the state distinguishes between stealing and robbery, the latter (the above caper included) defined as taking something held or controlled by another person (maximum sentence: life in prison).

The Case of the Missing Key. In late April, Amherst police arrested Jeremy Michael Gilbreath, 22, of Wayland shortly after giving him—an alleged assault victim—a courtesy ride. The arrest came after police determined he had allegedly stolen a pair of police handcuffs from the cruiser. To his misfortune, he had neglected to swipe the key that went with the cuffs [if ever there were complementary goods. . .]. After he cuffed a women later that night, she phoned the police, who liberated her and took Gilbreath into custody.

Craftsmanship by Smith & Wesson

Wig & Pen Pontificates: It’s no accident that auto insurers wait until a driver is 25 to begin lowering rates. Their m.o. is not just about driving experience but the way that the Young Adult Brain (YAB) handles risk. Indeed, the YAB is not the cat’s pajamas when it comes to risk assessment/due diligence. Compounding the fracture is that YABs are especially vulnerable in a culture that emphasizes dreams-come-true while coddling aspirations with selective rosy evidence over critical thinking and falsification.

Say what? You’re also wondering why this blog has failed to note that robbing a bank and handcuffing an unenthusiastic victim are WRONG? If this has not yet occurred to you, think twice when your own young adult offspring tells you that he or she plans to make a bank withdrawal.

*Consider all assertions about the alleged perps to be alleged by the Amherst Police Department except where otherwise noted.