A COMMISSION ESTABLISHED to review the effectiveness of special tax breaks issued by the state of Massachusetts raised serious concerns in its initial report about measures benefitting the film, alcohol, and mutual fund industries.

The Tax Expenditure Review Commission, in a first-of-its-kind report, tried to rate the effectiveness of 26 of the more than 200 tax breaks that in some cases have been on the state’s books for decades and never been subjected to any scrutiny even though they represent billions of dollars in foregone revenue.

State Auditor Suzanne Bump, a member of the commission, called the report an historic undertaking. She said it looked at the good and the bad, and provided a roadmap for the Legislature to address tax breaks that no longer measure up.

“Some of them were really obsolete, but still hanging on,” Bump said. “Some were really bad public policy. And some didn’t seem to be hitting the mark in terms of beneficiaries and social and economic impact.”

She said the report also shows the Legislature a way to generate new revenue without raising taxes by modifying or doing away with tax breaks that no longer work.

The commission evaluated the tax breaks nine ways using four different ratings – strongly disagree, somewhat disagree, somewhat agree, and strongly agree. Based on the findings, a summary was prepared for each tax break. Some, like the life sciences tax credit, were hailed for their effectiveness and transparency, but 10 were singled out as being particularly problematic.

The film tax credit, which is due to sunset on January 1, 2023, fell partly in the latter category. The commission said the tax break has succeeded in generating jobs in Massachusetts but at an extraordinarily high cost of $100,000 per position.

The film tax credit offers those shooting commercials, TV shows, and movies in Massachusetts a tax credit equal to 25 percent of whatever is spent in the state. The tax credit, which costs the state between $56 million and $80 million a year, is particularly attractive because it can be converted into cash by selling it to those with high Massachusetts tax liabilities.

“We are between ‘somewhat’ and ‘strongly’ disagreeing that it justifies its fiscal cost,” said the commission’s report. “While the film credit provides some immediate stimulus, it does not contribute to the long run growth of the state’s economy. Even though we are able to measure in detail all of the economic benefits of this credit, it still results in a cost of $100,000 per job created. We conclude that this is not the best use of the state’s money.”

Castle Rock is a Hulu TV series that filmed in Massachusetts.

The report said the exemption of alcohol from the state sales tax was designed to avoid double-taxing alcoholic beverages, which are already subject to an excise tax. The commission found, however, that excise taxes on alcohol are relatively low in Massachusetts compared to other states, so the net result of the sales tax exemption is that alcohol is taxed at a lower rate than most items subject to the state sales tax and far lower than other “sin” products such as marijuana and tobacco.

The report called the alcohol sales tax exemption “a historical accident” that doesn’t reflect current consumption patterns. “We feel strongly that it does not justify the cost of this exemption [$121 million to $132 million a year]. This excise tax raises less revenue than if the sales tax had been applied. Further, we note that most other states apply both an excise and a sales tax,” the report said.

The report also raised questions about a $21 million tax break that benefits mutual fund companies, primarily Fidelity Investments. The commission did not balk at a way of assessing corporate taxes that benefits a number of companies, but it did raise concerns about whether mutual fund companies should be included. The report said the tax break “singles out a narrow group of taxpayers in one industry for benefit in a seemingly arbitrary manner. Although the original legislation granting the benefit included job retention commitments, those job commitments lapsed roughly two decades ago. In the intervening time, the role of mutual funds in the overall financial services industry appears to have declined. The Legislature may wish to review the continuing purposes of this tax expenditure.”

It’s unclear what the Legislature will do with the report, since it’s often difficult to eliminate laws once they are enacted. Sen. Adam Hinds, a member of the commission and the Senate chair of the Legislature’s Revenue Committee, said he is going to do his best to make sure the report doesn’t just end up on a shelf somewhere. He said the commission’s initial report is a start at bringing greater accountability and transparency to tax breaks worth billions of dollars that are not reviewed periodically through the regular budget process.

For example, Hinds said a sales tax on alcohol was repealed by voters using a referendum in 2010. But he said the commission’s review indicated Massachusetts today is an outlier on alcohol taxation, partly because its excise taxes on alcoholic beverages are so low and partly because most states assess both an excise tax and a sales tax on alcohol products.

Members of the commission said all of their findings were approved unanimously. The commission was chaired by an official from the Department of Revenue and included auditor Bump; professors Michelle Hanlon of MIT and Matthew Weinzierl of Harvard Business School; and five members of the House and Senate or their designees.

One interesting test case of the report’s impact could be the film tax credit, which has been on the books in its current form since 2007 and is due to sunset on January 1, 2023, unless legislative action is taken.

The film tax credit enjoys strong support in the House, particularly from House Speaker Ron Mariano, while the Senate and Baker administration are considered more skeptical of its value. House Ways and Means Chairman Aaron Michlewitz and Rep. Mark Cusack of Braintree, House chair of the Revenue Committee, both served on the commission but were not present when the panel took action on the film tax credit, according to meeting minutes.

Mariano issued a statement professing his strong support for the film tax credit. “Eliminating the film tax credit sunset will provide the certainty needed for the industry to take root in Massachusetts,” he said. “This is especially true today with the popularity of streaming services and the increase in demand for content. Producers are looking for locations to make long-term commitments, and the existing sunset language is preventing Massachusetts from becoming truly competitive and creating job opportunities.”

The commission report doesn’t recommend eliminating all support for the film industry, but says alternative approaches might work better. For example, it said, subsidizing the construction of film studios might lead to more productions and more jobs in Massachusetts at less cost.