Politics & Other Mistakes: Lights! Camera! Money!

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Tax break.

That seems like something good. Much nicer than calling it a “fiscal fracture,” which more accurately describes the effect of cutting expenses for one group while raising them for everybody else.

Tax breaks cost every taxpayer who doesn’t get one money. In a sensible world, they’d only be handed out if they were sure to produce some broad public benefit.

Al DiamonI don’t mean to shock you, but this is not a sensible world.

Businesses that qualify for tax cuts by investing in new equipment, larger facilities or more hiring rarely return enough new revenue to cover the cost to the state treasury. The difference has to be made up by somebody else, which turns out to be you.

A better strategy for attracting economic development might be to do away with all tax breaks and use that savings to lower the overall tax rate. But the losers in such a shift (corporations) have way more lobbying clout than the potential winners (ordinary people), so that’s never gonna happen.

Instead, the Legislature keeps considering new requests for tax reductions to promote the pet projects of a wide variety of special interests. The most persistent of these is probably the film industry. Every couple of years, the people who want to make movies in Maine come begging for a subsidy to boost the number of in-state productions.

Even though the film business is far from a vital part of Maine’s economy (I tried to find a figure to demonstrate how insignificant it is, but it was too small to show up on anything other than a scanning electron microscope), it’s already entitled to a tax break most of the rest of us would love to have. All wages paid to workers involved in the production of a movie earn the producers a 10-12 percent rebate. All other spending qualifies for a 5 percent tax credit.

Pretty sweet — until Maine’s offer gets compared to the deals from places like Massachusetts, New York, Georgia, Canada and (I assume) Wakanda. They all hand out multiple times the breaks this state allows, so they capture all the glitzy movie deals.

Of course, several studies have shown that few of those heavily underwritten productions return enough benefit to cover the cost to taxpayers. But they more than make up for that lack of financial gain by showering the yokels they’re hoodwinking with Hollywood glamor.

For that reason, a group called Picture Maine has been trying to convince the Legislature to boost the deals offered to film companies. In 2021, proponents thought they had a sure winner in a bill that would have increased the wage rebate to 25 percent for local workers, 20 percent for out-of-staters (except for big stars and other hotshots), and 25 percent for all other production spending.

“We found there was a real hunger here, people who really want to work in the industry, but would rather not have to travel to Boston or Canada or New York all the time,” Sarah Clarke, a TV actor who lives in Hiram and wants to use a barn and inn she owns for films, told the Portland Press Herald.

For mysterious reasons (possibly behind-the-scenes opposition from Democratic Gov. Janet Mills’ administration), the tax-break measure stalled, was held over until the 2022 session, was amended in ways the movie folks didn’t like and eventually killed. But the local producers aren’t giving up. In an open letter, the Maine Film Association, an industry group, accused Mills’ Maine Film Office, a state agency in charge of next to nothing, of “butchery” for engineering the death of the bill.

Last October, Picture Maine held a star-studded fundraiser in Portland (if by “star-studded” they meant extras on “Law & Order,” “CSI,” or “The Walking Dead”) to prepare for another assault on the state treasury. Undeterred by the fact Maine has more serious concerns about more vital industries (the lobster fishery, for instance), the actors and producers, most of them summer residents looking for a little extra income while they vacation, are persevering in their claim there’s some general benefit to be obtained by making movies in Maine that will be seen only on late-night Romanian cable channels.

Tax break? Give us a break.

If you’re ready for your close-up, email [email protected].

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