Dean of House Didn't Mince Words on Univ. Endowments, Pensions, Film Tax Credits

Tuesday, May 13, 2014

It was good to see Angelo Scaccia, the longest serving member of the Massachusetts House, getting a few things off his chest during the recent FY 15 budget debate. 

Sure, Scaccia’s budget amendments went up in smoke on the day in question, Monday, April 28, but at least he spoke honestly, without fear, calculation or artifice.

Thanks to the State House News Service, which had a reporter on scene, we’re able to present The Dean’s words for leisurely perusal.
Up for consideration were three of 13 budget amendments filed by Scaccia, who let everybody know at the outset, “I had three amendments, but I got my arms twisted, Mr. Speaker, and I’m going to give up on two of them.”

One of the sacrificed amendments would have taxed all university endowment funds of $5 billion dollars or more at an annual rate of one percent.
“I think there were five (funds) that met that criteria (last year),” Scaccia said.  “Schools like Harvard, which are in my district, take up 51 percent of our taxable land base.  And in the case of Harvard and MIT, they give the city a donut: zero dollars.”

The other sacrificed amendment concerned the exemption of public employee pensions from the state income tax.  It would have subjected pensions above $50,000 per year to the tax and mandated that resulting revenues be used to reduce the state’s unfunded pension liabilities.
“For most of us,” Scaccia said, “$50,000 is something to look at down the road, but something that, if you’re a state rep, you will never get to.  We have folks, state troopers, (people) working in higher education, who are making oodles and oodles of money.  Years ago, the theory was not to tax pensions because most of us didn’t make much money.  Someone (today) is making $875,000.  [NOTE: He didn't say who.] That’s a lot of money.  His pension and other people’s pensions are going to bankrupt us in 20 or 30 years.  My amendment is every dollar after $50,000 is taxed at 5.2 percent.  Not bad to make $100,000 and only return to the Commonwealth $2,000.  I’m going to refrain from that issue, but I think it’s food for thought.”

Scaccia then turned to his amendment seeking to cap at $40 million per year the total amount of tax credits granted to professionals making movies in Massachusetts.
Citing a study by the Massachusetts Taxpayers Foundation, Scaccia said film tax credits cost the state $80 million dollars in 2013; that is, if the film tax credit had not existed and if companies had shot as many movies as they did in Massachusetts that year, that’s how much additional revenue the state would have received.

“My amendment,” Scaccia said, “is the same as the one my dear friend from Milton (Deval Patrick) filed, my favorite governor.  He said we should limit this issue to $40 million per year…It costs us a lot more, but $40 million is a pretty good start. He (Patrick) had to be personally embarrassed to subsidize Hollywood’s actors, actresses, etc., while trying to pick the pockets of regular folks to the tune of $2 billion last year.” 
This was an apparent reference to the most recent revenue enhancements adopted by the legislature and governor.

Scaccia said, “Yeah, let’s make a protest.  Ben Affleck, the Wahlbergs, and all those poor producers from Hollywood.  We don’t have the luxury of protecting this industry.”
A brief, lonely protest it was.  At the end of his remarks, Scaccia moved to withdraw the amendment.  No one objected.

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