Here we go again – headed into June sitting on pins and needles, this time in fear of Massachusetts Senate Amendment #38, which passed in the Senate on Tuesday, May 23, 2017 and so is included as a troubling obstacle in the Senate’s version of an ongoing budget process for fiscal year 2018.
Amendment 38 has two parts, both conceived with an apparent lack of understanding of the complex metrics of movie making. The amendment requires productions to increase their number of days of principal photography from 50% to 75% and/or increase their spend in
Massachusetts from 50% of their budget to 75% of their budget. While Massachusetts has been enjoying amazing growth in our film production industry, we still do not have the infrastructure to support requiring a film project to commit 75% of its budget here. Blockbuster movie budgets have a huge percentage of their film’s budget dedicated to postproduction. And even though we have great post houses in Boston, post is still captured in the western hemisphere by Montreal, New York and Hollywood.
Lisa Strout and himself. An IMAGINE Photo.
Let’s face the facts – these days movies have to be more global in scope to compete for worldwide box offices. If the drafters of this amendment knew anything about our industry they would know this amendment is not “trimming the tax credit” to save money for the state, but, it’s an attempt to render our Massachusetts incentives irrelevant in the global competition for the movie locations business.
I suspect that is the intent of some in the Senate, but not all. This was intended to sound like a reasonable compromise and a cost saving position to the casual observer. However, some well-intended members may feel misled when a more substantive explanation of this amendment and how it affects Massachusetts ability to compete is explained to them. Entertainment, of which motion picture and television constitute the major parts, is the country’s number one export, not only dollar wise, but for exporting our country’s cultural values and, yes, technology and production values! Is that so hard to understand? We need to keep this mighty business here.
and photo opportunities for the folks back home. An IMAGINE Photo.
The standing vote was effectively a kill shot (one we hope ultimately misses the mark in the combined and finalized budget) to our industry’s well-crafted incentives by eliminating one of the most positive features in our Film Tax Credits, our above the line credit which allow Massachusetts to compete with states and foreign countries that have much higher tax credit offerings, but do not include above the line or have credits not valued as highly as ours.
That’s our big hook. Above the line is precisely the reason blockbuster movies choose Massachusetts whenever they can. Big movies have big stars, even bigger directors, and those above the line salaries are what constitute blockbuster movies that garner the biggest budgets – more money to spend in Massachusetts. What is so hard to understand about that?
KNIGHT AND DAY, the first blockbuster to put us on the A-list Hollywood map, is a solid example of why we have a competitive advantage for now and is also paradoxically a well-worn ruse used to rid states of credits altogether. Tom Cruise, the top decision maker for that film shot here in Mass, is not just an attached star someone can claim is overpaid. He was an executive producer and the reason that the $80 million movie could be justified anywhere is his box office draw. This justifies any expenditures on the venture to begin with and he spent much of it here in this case.
He also paid Massachusetts taxes on his earnings! If he was limited to only qualifying $1 million, instead of $20 million, we would have lost all those taxes. And remember, film is forever – Cruise will make money on that film and his estate will as well long after he dies. Taxes will be paid to Massachusetts long after all of us are dead and gone for that film having been made here.
And remember, Tom Cruise and his partners had to prove every expense on KNIGHT AND DAY up
front to qualify for the credits. It is akin to saying I want the Patriots to win the Super Bowl (see the Article by Carl Hansen of Beverly on page 12), but Tom Brady or other marquee household name athletes in general are being paid too much so let’s cut their salary options down in our team budget. That will not get you past the Falcons in Atlanta, Georgia which coincidentally enough is one of our biggest current competitors in the locations game of big ticket movie making.
It’s apparent we’ve lost the Senate for the moment because some newer members have different views or have not been fully assisted in understanding our issues in a manner they can relate to. There are only 40 possible Senate members (38 votes possible given 2 current vacancies) but you can see if one supportive member leaves office and is replaced with an opponent within a few years we end up with a full 23 members standing in opposition to our point of view. We really have work to do with so much at stake.
