Riches-to-Rags Story Developing For Movie Operations in Michigan

If the state’s film subsidy were a movie itself, it likely would be a riches-to-rags story.

Just five years after the Michigan House of Representatives and Senate passed a bill by a combined 145-1 vote that gave huge subsidies to the movie industry, Republican state representatives are proposing to eliminate the film credit completely.

Nancy Cassis was a Republican state senator from Novi in 2008 and the only legislator to vote against the film subsidy.

"I think the mounting body of evidence that the economic return of using film credits is minuscule and actually a questionable subsidy to the movie industry led to the realization that such 'taxpayer giveaways' needed re-evaluation," Cassis said. "In Michigan's case, there is a pressing priority to improve our transportation infrastructure. Thus, the accountable effort to leverage tax dollars more responsibly."

Cassis said the publicity from a failed studio project in Allen Park as well as state public employee pensions having to bail out another studio in Pontiac by making its bond payments have led people to rethink the film tax giveaway. 

"… the 'handwriting on the wall' became too overwhelming to ignore," she said.

The state gives approved production companies up to 35 percent incentive on qualified expenditures. The state awarded $93 million in tax credits in 2012, some for projects in production as far back as 2008.

Ari Adler, spokesman for House Republicans, said legislators are looking at all areas to find money for roads within already existing revenues.

"For now, one of those areas is the film incentives," Adler said. "I'm sure this issue will continue to be a focal point of budget negotiations as the process moves forward toward completion on June 1. Certainly, there is some work to be done by those who believe the film incentives should be increased to prove the overall value."

House Democrats asked that the budget for the state film office remain at $50 million.

"We consider the film incentives to be proven job creators in this state," said Katie Carey, spokeswoman for House Democrats. "Additionally, why are we getting rid of a program that has created jobs when Michigan still has an unemployment rate higher than the national average?"

State Rep. Tom McMillin, R-Rochester Hills, said a sign that the film credits were a bad deal is that both the Michigan Education Association and some tea party members oppose them.

"It is becoming more clear that these Hollywood film subsidies mainly send our Michigan taxpayer dollars out of the state to subsidize the salaries of millionaire actors and directors," Rep. McMillin said. "Those tax dollars come from the pockets of our citizens and businesses. If those dollars stay in their pockets, more people are employed in Michigan."