People enjoy seeing movie stars at work in their towns and local places on the big screen, and we’ve been seeing a lot of that since Massachusetts lured movie-makers here with generous tax breaks. State leaders praise the results of the tax breaks, state, but there’s a big hole in the plot.
A new study finds there is no way to know if those revenue sacrifices – whether for blockbuster movies or high-tech startup companies – are a smart investment or expensive folly.
State Auditor Suzanne Bump recently looked at 92 business tax breaks or credits offered by the state and found that only seven called for periodic reviews to determine their value. Only 10 had provisions allowing the state to get back some of the billions of dollars in taxes it forfeits if a company doesn’t meet job-creation goals or other benchmarks.
Recipients and many state officials say the benefits to the state are clear. Department of Revenue statistics released earlier this year suggest the movie tax credit is also helping create more jobs here. Yet the lack of accountability and transparency cannot be allowed to continue. The benefit to the state should not be a mystery.
State Sen. Jamie Eldridge, D-Acton, has filed legislation to establish uniform standards for economic development incentives and mandate clawbacks when a deal goes sour. It would also require that all details related to such incentives, which are now often shrouded in secrecy, be posted by the state on a searchable website.
The Legislature must implement standards to measure performance and consequences for those who fail to uphold their end of the bargain. Movie making and life sciences may prove a boon to the state in the long run, but we cannot afford to blindly give any industry a free pass without tracking whether the taxpayers got their money’s worth.