Film tax credit

Proponents of luring Hollywood production companies to Massachusetts with generous tax credits overstate their case. Tax credits do not create permanent jobs that benefit state residents and they are not free. A biennial report of the Massachusetts Tax Expenditure Review Commission, published in March of this year and cited by Mr. Giovanni Alabiso, concluded that net new spending in the local economy due to filmmaking was $503.2 million over an 11-year period or roughly $46 million per year. That’s awfully low if you consider the $56 million — $80 million annual cost. Mr. Alabiso claims these figures ignore the residual spending effect. Perhaps they do. But filmmaking is disruptive. Streets are shut down for days, impacting small businesses that rely on walk-in business. Film crews stand around for hours waiting for the sun to go down while they shoo residents off the sidewalks.

Usually, states offer tax credits as a way of earning a return on investment. But the Tax Expenditure Review Commission report concluded that the cost of each job created by the film tax credit was $100,000. On the proposition that the tax benefit justified its cost, the commission voted to rate the film tax credit between “strongly disagree” and “somewhat disagree.” It’s time to end this experiment in corporate welfare. The tax credit is in no way vital to the Massachusetts economy and the return in no way justifies the cost.

— Sean F. Flaherty, Charlestown