Weak Movie Subsidy Support — Even With 73 Percent of Cost Not Shown

Although the state of Michigan has approved $361 million in tax subsidies for Hollywood movie companies, a recent Detroit Free Press poll was only able to use 27 percent of that total when seeking the opinion of Michigan residents regarding their support for the program. Still, even after revealing just a fraction of the subsidy’s total cost, the poll revealed more opposition than support for the film subsidy.

The total used by the Free Press tabulates how much the state had already paid to the movie companies, rather than the amount Michigan has actually approved — essentially leaving out the future liability actually on the state’s books. There is a delay between the time when a film credit is approved and when the state cuts the check to the film company. When conducting the survey, the newspaper did not have access to the Michigan Film Office’s 2010 report, which was released just days after the Free Press' poll.

The Free Press poll asked readers: “$96 million in taxpayer money underwrote the cost of films made in Michigan since 2008, for up to 42 percent of the costs. Is this a good use of taxpayer money?”

The poll showed that 46 percent think the film subsidies are bad policy, compared to 41 percent that approved. The poll was conducted from Feb. 26 to March 1.

“Saying that the film office has only cost $96 million ignores most of the obligation,” said James Hohman, a fiscal policy analyst for the Mackinac Center for Public Policy, in an e-mail. “It’s like buying a new Corvette, putting $1,000 down, and saying that it only cost you the down payment. We’ve already racked up $361 million of payments and expected payments, and the program as it stands will only get more expensive unless reigned in.”

Detroit Free Press Reporter Katherine Yung  said in an e-mail: “The survey question was asked before the 2010 MI Film Office Annual Report came out. The $96 million came from the Film Office — we wanted to use the actual number of dollars that has been spent so far.”

On March 1, the 2010 film report was released to Gov. Rick Snyder. Michigan’s film office reported it awarded $47.9 million to the film industry in 2008 and $68.7 million in 2009. Hohman also discovered $72 million in tax credits that were approved but never included in the 2008 and 2009 reports.