State Senate proposes a budget that would pare back incentives
By Philip Marcelo
BOSTON (AP) --A new "Ghostbusters" movie filmed in Boston two years ago with the hopes of rebooting a beloved franchise. Instead, the box office dud has unintentionally played a role in giving new life to efforts to rid Massachusetts of its film industry subsidies.
The state Senate has proposed a budget paring back what's considered among the most generous of the 36 states currently offering tax incentives to film companies.
And some critics of the program have pointed to recent big budget Hollywood films like "Ghostbusters" — which scored one of largest tax benefits in the program's history at $26.7 million — as prime examples of why the benefit needs to go.
"There is no reason to believe that the tax credits the state reportedly gave to the producers of this film were the most effective way to promote jobs and economic development," said Noah Berger, president of the Massachusetts Budget and Policy Center that's long called for scrapping the program.
David Hartman, head of the Massachusetts Production Coalition that advocates for the local film industry, countered that the economic impact of major movie productions like "Ghostbusters" are felt many times over, not just from the hundreds of temporary production jobs they create but the spending of that crew on local goods and services.
He wasn't able to readily quantify the economic impact of "Ghostbusters" and the film's producers didn't immediately comment.
Featuring Melissa McCarthy and Kristen Wiig, "Ghostbusters" was among 61 productions issued more than $61 million in credits last year. Others included "Central Intelligence" ($11.3 million), "The Finest Hours" ($14.4 million) and "Live By Night" ($1.1 million), preliminary state Department of Revenue data shows.
Sen. Michael Rodrigues, the Westport Democrat who proposed curtailing the credit, says his qualm isn't with "Ghostbusters" specifically.
Too much of the program's benefit, he says, is flowing to out-of-state companies and being used to supplement the salaries of high-paid actors. The film tax credit is equal to 25 percent of a production's in-state payroll and production costs.
"It's hard to look into the face of a single mother and tell them that we cannot afford to provide them with the childcare voucher but we can afford to pay 25 percent of the salary of Tom Hanks or Will Ferrell," Rodrigues said.
His proposal is part of a Senate budget that will need to be reconciled with the House's spending plan, which doesn't include the provision.
Rodrigues calls for preventing film companies from claiming salaries worth $1 million or more as an eligible expense. (There currently isn't a salary limit.) The proposal would also increase the minimum thresholds for spending or time spent filming in Massachusetts from 50 percent to 75 percent of the production.
Hartman, of the Massachusetts Production Coalition, complains the proposal would "cripple" the local industry.
Prominent recent films like "American Hustle," ''Black Mass," ''Joy" and "Patriots Day" would likely have bypassed Massachusetts if not for the credit's current structure, he contends.
Rodrigues counters that even with his proposed limits — projected to trim $14 million from the roughly $80 million a year the state budgets — Massachusetts still has one of the more generous film subsidies in the country.
The proposed $1 million salary cap is roughly in line with what other states have imposed in recent years as they seek to rein in film credit programs, said John Bails, executive vice president at Film Production Capital, a Shreveport, Louisiana-based film tax credit consulting firm.
Alabama, Kentucky and North Carolina all have some form of $1 million cap, while Mississippi has a $5 million cap and New Mexico imposes a $20 million spending cap on all performers, he said.
Higher thresholds for spending and time spent filming in-state are also increasingly common, though a 75 percent minimum would be an outlier, Bails added.
And local policymakers are looking at other ways to revamp the programs.
A bill approved by the Louisiana House of Representatives this year, for example, offered greater incentives for production companies that chose to headquarter in the state and also called for the state to get a share of a film's profits.
Bails predicts the Louisiana bill, which ultimately didn't clear the state Senate, is a harbinger of things to come: "States will eventually have to evolve in order to start getting a direct return on investment."
Droga5 Appoints Emma Montgomery As Global Chief Strategy Officer
Creative agency network Droga5 has appointed Emma Montgomery as global chief strategy officer. She is the third global appointment for the agency this year, with Pelle Sjoenell named worldwide chief creative officer this past March, and global CEO Mark Green recently appointed this fall. Montgomery will be responsible for connecting and supercharging Droga5’s strategy and creative offerings globally. She will be based in its headquarters in New York City.
“Emma is a world-class strategic leader and authority that I’ve long admired and dreamt of being partners-in-crime with,” said Sjoenell. “Her work inspires the creativity that connects people and brands in ways that move business and culture forward, so I’m excited to finally be able to work with her alongside Mark, and to see her lead and further strengthen our leadership and strategy teams around the world.”
Montgomery joins Droga5 after serving as CEO of DDB Chicago. She’s been in the industry for over 20 years, and has served in several high-level leadership positions throughout her career, including as president and CSO of Leo Burnett Chicago, global CSO of TBWA, and CEO of Leo Burnett Australia. She’s also worked across a breadth of categories and multiple global clients such as Kraft, Aldi, Diageo and Molson Coors, among many others, including challenger brands and startups.
“I’m excited to join Droga5 and have the opportunity to help carve out a new path for the brand globally, building on its tremendous legacy of creative leadership,” said Montgomery. “The potential of Droga5, combined with the possibilities of Accenture Song, was too exciting to pass up. No other agency has what they have, and as marketing shifts, the chance to make creativity a genuine... Read More