Candidates Shocked Schilling Could Get Tax Credit Too
Friday, July 30, 2010
Candidates for state office were deeply concerned to hear that Curt Schilling could get a tax credit on top of a $75 million loan guarantee the state is giving him so he will move his video game company here.
“It raises some serious questions that need to be examined,” said J.R. Pagliarini, campaign manager for independent gubernatorial candidate Lincoln Chafee. “It’s a classic case of unintended consequences but the state has to be very careful about its generosity during these difficult economic times.”
A GoLocalProv investigation has found that one intended consequence of the deal with Schilling’s company, 38 Studios, is that it could be eligible for an annual $15 million tax credit meant for the film and television industry. “It gives us reason to pause and realize that sometimes every action has an opposite and equal reaction,” Pagliarini said.
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Ken Block, the Moderate Party candidate for governor, said he was “incredulous” when he heard that Schilling could get the tax credit. “The state has already gone out of its way to incentivize him to come. I think it’s a bad deal,” Block told GoLocalProv. “I think the EDC, if it still has the ability to negotiate, should make sure we offer one or the other, but not both.”
Earlier this week, the Rhode Island Economic Development Corporation voted in favor of the $75 million loan guarantee. A summary of the terms and conditions of the deal makes no mention of the tax credits.
“I would hope and expect that was an oversight on everybody’s part and that there wasn’t an intention to make sure these credits were available on top of the loan guarantee,” Block said.
Roberts: Rhode Islanders Have Questions About Deal
Lt. Gov. Elizabeth Roberts, a Democrat who is running for re-election, is concerned that the Schilling deal may not be good for businesses already in the state. “The deal with 38 Studios concerns her for two reasons. One, it ties up so much of the loan guarantee funding into a single venture and, two, Rhode Islanders have real questions about this deal such as the applicability of the film tax credit and whether that was considered as part of the EDC deliberations,” said campaign manager Dan Meuse.
But, despite those concerns, he said Roberts was committed to the success of 38 Studios now that the company is relocating to Rhode Island.
Meanwhile, Democratic gubernatorial candidate Frank Caprio said he needed more time to study the issue. “He’s very supportive of the film industry but he needs to get some more information about the effects of this deal,” said spokesman Nick Hemond. “He needs to learn more about the impact of this deal on the tax credits.”
Moffitt Still Supports It
Republican candidate for governor Victor Moffitt has endorsed the deal between Schilling and the state—and said his position hasn’t changed. "Curt Schilling was a great closer for the Red Sox and (EDC Executive Director) Keith Stokes will be a great closer for the EDC if this project is successful,” Moffitt said.
Moffitt, a former state rep, said he was a sponsor of the bill that created the tax credits for the film and television industry—and he didn’t have a problem with the fact that the law allows the credit to be used for video games. "I am very supportive of the movie, television and arts industry in Rhode Island,” Moffitt said. “Making movies, making video games or making television series will add jobs and bring money into Rhode Island.”
Cool Moose Candidate Doesn’t Blame Schilling
Bob Healey, the Cool Moose Party candidate for lieutenant governor, doesn’t believe government should not be in the "business of doing business." But since it is, he said he wouldn’t blame Schilling if he seeks the film production tax credits. “If you’re a businessman, if the state is being played, you might as well play it for all it’s worth,” Healey said.
“It’s probably not the best use of government money,” Healey added. “I’ve always said you can’t regulate someone you’re in bed with. It’s not a good plan.”
EDC officials did not respond to several calls yesterday seeking comment.
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