Sunday, December 6, 2009

Businesses Benefit from Influx of Films, but Critics Question Tax Break, Disruption Irks Some Residents

Fenway News published a story I had been working on for a few weeks about the Massachusetts tax incentive that brought a lot of big filmmakers to Boston and other parts of the state over the summer. The story was published in the December 2009 issue. Below is the story copied from a Word document.

Businesses Benefit from Influx of Films, but Critics Question Tax Break, Disruption Irks Some Residents
By Meena Ramakrishnan

Main streets closed off to the public, sounds of explosions, and celebrity sightings have become common to Bostonians. While the film industry is based in Hollywood, the latest Massachusetts film credit has brought many filmmakers to Boston.
Over the summer, Ben Affleck filmed “The Town” in Boston and Cambridge, and Tom Cruise shot scenes for the movie “Knight and Day.” Production crews closed streets around Fenway Park, Copley Square and the North End. Both films wrapped shooting in Boston last month, according to Sam Baltrusis who blogs on the Loaded Gun Boston website.
“For the vast majority of movies, Massachusetts is very competitive,” said Nick Paleologos, executive director of Massachusetts Film Office, “Not only do we have a decent tax incentive, we have a very qualified crew base.”
This year, the state has seen a record number of media productions, including 13 feature films with production budgets that exceed $30 million, according to the July 2009 Department of Revenue (DOR) report. The film credit was first passed in 2005 and grants tax incentives to feature films, television series, documentaries and commercials.
As many as 3,000 jobs have been created in the state’s film sector, but more than half of the wages are paid to California residents who may earn over $1 million. The DOR report does state that productions with larger budgets are less likely to hire labor outside of Hollywood.
Paleologos said even though most of the film industry’s workforce comes from outside Massachusetts, the state collects taxes from the actors’ and workers’ incomes.
But some say the tax incentive puts a heavy a burden on taxpayers. According to the report, for every dollar the state spends in incentives, the return is around 16 cents. President Michael Widmer of the Massachusetts Taxpayers Foundation said the tax break does not create enough jobs to offset state expenses.
“Of all the tax credits I’m aware of, this is probably the worst deal I’ve seen. We should admit that this is a terrible economic investment, especially in a fiscal and economic meltdown, and we’re cutting programs across the board. We can’t afford a $100 million project,” he said.
Widmer said the construction of film studios in Massachusetts would help to boost state employment instead of relying on labor from Hollywood.
According the Boston Globe, there have been several proposals for studios around Boston and Plymouth. Many agree that these ventures would not have been possible without the film credit. Construction for Plymouth Rock Studios planned to develop a golf course into a movie studio that would add to the state profits from the tax credit and stimulate employment. Plymouth Rock Studios predicted in an online video clip that Massachusetts would become “Hollywood East.” However, funding fell through weeks before construction was to begin.
Even without a film studio, some local businesses are benefiting. But according to a study conducted by UMass Boston Professor Pacey Foster, the businesses that benefit may only be those in the film industry. In an e-mail he said, “There has certainly been lots of job growth, particularly among the unionized trades who actually make the films. There has also been significant growth among local film service companies like camera rentals.”
In the Back Bay, local businesses like Brickyard VFX on Newbury Street have seen more clients since the tax incentive, according to Dave Waller, founder of Brickyard VFX on Newbury Street. Brickyard VFX assists films with visual effects and post-production work.
“[The tax incentive] really changed things around here quite a bit,” Waller said. “There are a lot of sort of unlikely businesses that have benefited from here. We’re able to hire additional people, which is something we like to boast about.”
Despite the benefits the tax credit brings, some residents do not appreciate the movie crew and celebrity presence around Boston. Lauren Dewey-Platt, who lives in the Fenway neighborhood, said in an e-mail that when “The Town” and “The Zookeeper” were shooting scenes, it was disruptive to residents on her street.
“It was highly disruptive for me because it all took place in front of my building, overnight between 6 p.m. and 6 a.m., no less, when I and most of my neighbors were trying to sleep,” she said.
Dewey-Platt said all the benefits go to the state while neighborhoods and residents do not get any compensation for tolerating loud noises and street closings. And, not everyone gets excited about movie star sightings. She said, “Believe it or not, not every resident of the City of Boston is a celebrity sycophant.”

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