By Dave Wedge
The state is handing out millions in tax credits to biotech firms and film producers yet the public has no clue which firms are getting the breaks because of a loophole in the law that lawmakers are now seeking to close.
“We spend heavily on economic development but it’s difficult for us to get a handle on just how much,” state Rep. Steven D’Amico (D-Seekonk) said. “It’s also difficult to measure our success.”
D’Amico and Sen. Jamie Eldridge (D-Acton) have filed a bill to require the state to reveal the names of companies that receive much-coveted tax breaks, as well as document how many jobs the subsidies have created. Current state law makes it impossible to find out who is getting these lucrative tax credits because paperwork is filed with the Department of Revenue, which keeps all tax documents confidential.
“We’re cutting millions of dollars in the budget,” Eldridge said. “We need to improve transparency. This will allow us to determine if we’re spending this money wisely.”
In addition to requiring annual reports from the DOR on companies receiving tax credits, the proposed legislation includes an “escape” clause that would allow the state to recoup cash from companies that don’t create promised jobs or underperform.
Gov. Deval Patrick has proposed a similar plan that would require companies receiving state tax credits to be publicly identified in annual reports. The businesses would also be required to report how many workers they employ as well as their salaries.
In addition to spending $1 billion on life science firms, Massachusetts has one of the nation’s most generous film tax breaks, handing out $110 million this year alone to lure Hollywood projects.
State Rep. Brian Wallace (D-S. Boston), a vocal supporter of the film tax breaks, backs improved reporting and said: “We want it to be as transparent as anyone. We’re just concerned about making sure we put our best foot forward for the film industry. This has just been a boon for the state.”