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Critical Mass.: Film Rebates Slammed in Bay State

0708 FILM Mass We've often championed tax incentives for film and TV production, because they've proven to create work for actors. But they might not always work the way they were intended.

The Boston Herald, citing a study from the Massachusetts Department of Revenue, reported last weekend that the the commonwealth is only getting back 15 cents in tax revenue for every $1 it doles out. In 2008, the program was down $95.5 million, or roughly 10 percent of Massachusetts' overall budget deficit.

By comparison, a 2008 study of the New York program by accounting firm Ernst & Young says the Empire State earns almost $1.90 for every $1 in tax money it spends. Why the discrepancy in the results? Massachusetts seems to allow filmmakers to get money back on the entirety of their budgets, including salaries for actors, directors, writers, and producers. New York's incentives are strictly limited to below-the-line expenditures--for crew and so forth.

The theory behind the incentives is that a film production comes to town and the people earning money then spend it in-state. For that to work to maximum advantage, it helps if most of the employees are local, so they can pay wage, sales, and property taxes year-round. But, according to the Herald, only 18 percent of the $289 million last year went to local residents. Making the matter worse politically is the amount of money the commonwealth has committed over the next two years to the rebates: $250 million.

Gridlock in Albany and confusion in the Bloomberg administration have stalled New York's program, but the Massachusetts incentives don't appear to be in danger. According to the Herald, Gov. Deval Patrick (D) refused to limit the amount of tax rebates that can be applied to actors' pay. State Rep. Steven D'Amico (D) told the paper: “Every dollar we waste on Tom Cruise’s salary is a dollar we could have used to pay for teachers or fixing roads.”

Pictured
: Jack Nicholson in Martin Scorsese's The Departed, filmed in Boston.

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