Elections 'could threaten' Michigan's film incentives, Wall Street Journal says
Michigan's film industry incentives -- which provide a cash rebate of up to 42 percent of a production company's spending in Michigan -- are becoming a centerpiece in the debate over the future of Michigan's economic development strategy.
The Wall Street Journal, in a story today profiling the effect of the incentives on Michigan's economy, reported that the film incentives could be eliminated as lawmakers start to question their effectiveness.
Filmmakers shot scenes for Richard Gere's "The Double" at the ex-Pfizer site in Ann Arbor this summer. For the film, this conference room was transferred into a CIA situation room.
Nathan Bomey | AnnArbor.com
Movie and TV companies have spent nearly $350 million in Michigan since the incentives were approved in spring 2008, WSJ reported, citing statistics from the state's Michigan Film Office. That's up from $2 million in 2007.
Film companies created some 6,763 production jobs and some 4,000 for extras, the Detroit Free Press reported earlier this month.
In the Ann Arbor area, movie companies have shot about 12 major productions, including Richard Gere's "The Double" and Drew Barrymore's "Whip It." The Ann Arbor Area Convention and Visitors Bureau's Ann Arbor Film Office estimates that, in 2009, film companies bought 20,000 room nights in the Ann Arbor region -- the equivalent of filling a 150-room hotel for more than four months.
But lawmakers are questioning whether the state budget can afford to continue paying film companies to shoot productions here. And the debate over the film incentives is becoming part of the conversation in Michigan's gubernatorial race.
Lansing Mayor and Democratic candidate Virg Bernero reportedly told a crowd of policymakers and business leaders in Grand Rapids this morning that he would keep the film incentives if they're truly creating jobs.
Ann Arbor venture capitalist and GOP candidate Rick Snyder earlier this month told AnnArbor.com that the film incentives were "a dumb thing to do."
"It's a fairly transient industry that largely has been in an escalating war of incentives across the nation," Snyder said.
But Snyder suggested the film incentives should be phased out gradually instead of being eliminated immediately.
"One of the problems we have is whipsawing businesses by changing rules," he said.
Contact AnnArbor.com's Nathan Bomey at (734) 623-2587 or nathanbomey@annarbor.com. You can also follow him on Twitter or subscribe to AnnArbor.com's newsletters.
Comments
HaeJee
Mon, Sep 20, 2010 : 2:26 p.m.
I was on the fence until I finally read what I had feared. Snyder is a typical right wing conservative. Having Michigan cities in movies is a great long term advertisement for our state. Detroit is not Michigan, but the beauty of our outdoors are. Also... I read today that Snyder (like every male conservative) wants to tell women what we should do with our body. No thanks, he can keep his '50s mentality in his church.
Snarf Oscar Boondoggle
Mon, Sep 20, 2010 : 8:50 a.m.
oh.... my! in teh cold, claer light of day, the arithmetrick says that teh cost/burden is $10 paid OUT for every $1 paid IN. such a deal! and who is getting trashed in teh bargin? michigan taxpayers are getting trashed, that;s who.... bernero thnks this is good. i disagree.... snyder thinks this should be tapered down. i agree.... perhaps, collectively, we could agree to a lighter burden, say, oh, paying out only $5 for everhy $1 paid in. it;s still 'such a deal' and to those of you who knee-jerked away from the better managemnet solution for michigan, please reconsider, at least privately, in the privacy of your voting booth.
John
Mon, Sep 20, 2010 : 7:12 a.m.
The Film Incentives are a good idea, but the execution of them has really given us the worst of both worlds. Because they have been so controversial, from the beginning there has been a constant threat that the incentives would not last. That uncertainty has basically put the film industry into a "get it while you can" mentality, which prevents production companies from planting deep roots here in Michigan, and has therefore only benefitted the state during brief "in and out" periods, instead of fostering what could be a terrific long term industry for Michigan. That said, we still pay the money. So basically the state is paying a lot for a short term, minor benefit. Either the Film Incentives should be institutionalized (both in law and perception) or we should get rid of them. As one who owns a production company that has been in Michigan for 11 years, I hope they keep the incentives, but we will never reap the full benefit until filmmakers know they are here to stay.
InsideTheHall
Mon, Sep 20, 2010 : 5:23 a.m.
The film tax cheme was part Granholm's Grand Plan that has blown us all away. These are not sustainable jobs and frankly misguided economic policy which is what we have come to expect from Democrats. Mr. Rusty: Yes, we want to eliminate inefficient and ineffective "government programs" and we will.
Movie Locations
Sun, Sep 19, 2010 : 3:17 a.m.
Being involved within the film industry here in Michigan for over 15 years, I also think it's time to discontinue the current tax incentives unless there are realistic restrictions exclusive to Michigan film crew and vendors. Currently everyone from Hollywood, Louisiana, New York, and Chicago who are out of work have come to Michigan to work on these films. Out of state employees receive a 30% tax credit, so essentially Michigan is now buying jobs at between $150,000-$190,000 per job. This just doesn't make sense. Michigan will never be Hollywood, even with the support of our states dreamers out there. That is the joke being played upon Michigan. Currently there are many schools out there preying upon the desperate and hopeful who are willing to pay and train for jobs that will never materialize... Who benefits? Those schools who could care less what happens to you when the classes finish. THe last movie I worked on had a crew of over 100 people and 80 of them were from other states. Do not believe that Michigan will ever have enough crew experienced to Hollywood's standards, it will never happen. That's the big joke being played upon Michigan taxpayers. Hollywood is just here to take advantage of the tax credits, and use and abuse the taxpayers to make a bigger profit. Hollywood is not here to help Michigan in any way, period! Wake up! Tax incentives have never been benefitted any state that has enacted them. Why do you think that California has never had any tax credits for movies.... That's the big joke. Our brian less Governor just saw the Hollywood lights, and stars coming to her state, and never studied the other states who wasted tax dollars on incentives for Hollywood... Good riddance Hollywood... Take that money and fix our public schools, to educate our next generations.. And don't forget about our roads either....
Hot Sam
Sat, Sep 18, 2010 : 6:02 p.m.
Those who are looking at this through a partisan fog should be reminded that it was support on both sides of the aisle that made it happen. Those who wish to make points in favor of the subsidies, for which there are many, should not use any regarding math...they don't add up...
ChelseaBob
Sat, Sep 18, 2010 : 2:41 p.m.
It's hard to believe what I'm reading. By the most friendly estimates we are spending $10 for every $1 in economic activity. The reality is likely worse than that, since the film people get a credit for what they spend, and they are probably cooking the numbers. I watched a crew come to Chelsea. No local hiring. Just a few nights in local hotels and bars. Its nice, but that's not worth millions. That's what they collected. Since many of you were film majors, let me help you out here. $10 is a bigger number than $1. That means if we spent $10 for every $1 of economic activity, we LOST a lot of money. We'd be better to give it out randomly to Michigan residents. These aren't travelogues they're making, so they don't change "the impression" of the State. The only reason this program exists is because politicians like rubbing elbows with celebrities. Otherwise it makes absolutely no sense!! Those of you in favor of the program need to move out of your parents basement, get a real job and pay taxes for a few years, and then check in with us. I'll bet you're not real keen on it then.
Carole
Sat, Sep 18, 2010 : 8:13 a.m.
Unfortunately, I voted to keep the film industry coming to Michigan. But after further investigation I have changed my vote to yes, the incentive for filming in Michigan should be reduced at least or even eliminated. Reason for that decision is that we, the taxpayers, are paying them more to come to our great state than what they are generating in funds back to us Michiganders. Rick you still have my vote.
AA
Sat, Sep 18, 2010 : 7:52 a.m.
Classic. Subsidize coddled Millionaires and their entourages to make straight to rental crap movies. I am so happy to help out the Lindsays around A2. We throw dollars at this industry and we get to hand them awards and everything! I would rather be with real people in a breadline. God help us.
MjC
Fri, Sep 17, 2010 : 9:53 p.m.
Rick Snyder just lost my vote - and I don't like Bernero at all!
annarbor28
Fri, Sep 17, 2010 : 8:26 p.m.
No other industry is growing in Detroit, and any good publicity will help people look positively on Michigan, which in turn makes it easier to get grant money, businesses, academics, etc, to Detroit, and Michigan in general. Someone said you have to spend money to make money and that is what Detroit and Michigan is doing. People in other parts of the country make fun of Detroit. Let's do something decent for a change in this state. The restaurants, hotels, drivers etc have customers, employ people and may just stay in business. If Rick Snyder can't see that, then I think he misses the boat on Michigan. He lost my vote on this one.
E. Manuel Goldstein
Fri, Sep 17, 2010 : 7:42 p.m.
There goes "Ricky Rich" again, looking to outsource more Michigan jobs, this time in the nascent film industry.
runbum03
Fri, Sep 17, 2010 : 7:12 p.m.
So far with the meter still running, we have spent or will spend about $1/2 Billion dollars on this subsidy program. Chump change to some of you, but the cost was about 8,000 Michigan jobs that were lost because this $1/2 Billion was sucked out of local Michigan communities and most of the money has left the State for good. In Austin Texas, they have discouraged outside concerts (hence Austin City Limits) and big box stores to keep local money in the local community (it's called Keep Austin Weird!). The average household income is $95,000 in Austin. Wake up and smell the Colonial Tea! Keep Michigan Weird, too.
dj
Fri, Sep 17, 2010 : 7 p.m.
This is a bad move, Rick. Bringing the movie industry to the state has been such a positive incentive in the sense of bringing $$ to MI and shedding a mostly good light on Michigan. Local communities feel the up-tick in their economy when film crews rent space, employ locals to assist, eat at restaurants, etc. Please, it is all good. We need new business to come to the State. Also not debating the competition is not a good thing at all. It makes one look quite pompous.
RobertinSaline
Fri, Sep 17, 2010 : 5:22 p.m.
Re-read Nathan Bomey's update about the Senate Fiscal report- The state paid OUT $100 million in 2009 for the $10 million in revenue (taxes) it got from film-related activity. Same thing in 2009 - for every $1 the people of Michigan received, they paid OUT $10. This is like owning a Starbucks and giving away $10 in coffee for every $1 you sell. This doesn't work. What other business gets this great deal?
EDM450
Fri, Sep 17, 2010 : 5:10 p.m.
The past 8 years have been led by the "Your gonna be blown away" Leadership that really has show nothing. We gave an Attorney General a shot at bringing business's back to Michigan. Now how about we let a Businessman give it a shot. He's only ran several successful Industries including Gateway, Inc. Who would know better on how to create jobs then a Businessman with a stellar track record? Not to mention he's from Ann Arbor, studied business and Law. If you have a problem that is devastating your state, you bring in a person who is a specialist in that field don't you?
oldrustynail
Fri, Sep 17, 2010 : 4:27 p.m.
It is my understanding that many of the states that offered film industry incentives place a cap on the amount paid out and that Michigan has no such cap. How about a cap? We keep the film industry coming with the extra jobs and services and lower the state money going out.
bs
Fri, Sep 17, 2010 : 4:24 p.m.
A lot of years ago someone once told me "you've got to spend money to make money". Establishing a film industry that will sustain itself in this state takes time. Yanking away this program now is absurd. The republicans aren't going to be happy until this state is empty and dead, and then they will blame it on Granholm, or Obama, or Clinton.
John of Saline
Fri, Sep 17, 2010 : 4:08 p.m.
Mikey, are you serious? The movie people are basically PAID to come here to film. By our taxes. They don't pay all the same taxes we dirtbag actual Michigan citizens pay; they're above that. You think that's a good thing? Maybe they could lower taxes for everyone? Or is it your policy that we should favor one industry and punish everyone else?
Mikey2u
Fri, Sep 17, 2010 : 3:51 p.m.
The Republicans want to raise the taxes of film makers and give the money to Lansing to pay off the $500 million budget deficit. Do the Republicans want to raise anyone elses taxes? Tax and spend, tax and spend.
Christina
Fri, Sep 17, 2010 : 3:16 p.m.
Dear Rick Snyder, From someone who has been fortunate to work in the film industry both in Los Angeles and LA-- I know that right now the numbers don't add up because people from LA are bringing people from LA they trust with them. But as they get to trust poeple here in MI the tide will shift. It's already happening, just give it a chance. It's the best thing this state has got right now. Thanks!
AlfaElan
Fri, Sep 17, 2010 : 2:43 p.m.
While the subsidies may not bring in enough business to make up their cost, they do change the impression of the state to the outside world. They also diversify our economy some which will help stabilize things as the auto industry goes up and down. Overall I feel they have been a good thing, but I also do not think that it is wise to get into a bidding war with other states/provinces. Like all things there are shades of grey and whether the current one is the best or in need of tweaking is hard to say.
Hot Sam
Fri, Sep 17, 2010 : 2:35 p.m.
XMO Asks """How much does each film job created in Michigan cost the taxpayer?""" Whats a few million here and there when you may get to see Neve Campbell at the Black Pearl???
GoBlue2009
Fri, Sep 17, 2010 : 2:31 p.m.
As the aforementioned UM grad in Film in Juliana Keeping's recent article, I can tell you that they're absolutely worth it. Instead of moving to New York or California for jobs, my friends and I have been able to find jobs right here at home. And no, they're not all "going to out-of-state union workers." -Geoff Chiles
Charlie
Fri, Sep 17, 2010 : 2:27 p.m.
I just wanted to clarify, since one of the choices was "No, they're creating jobs in the creative economy." Actually there are several 100 people working now that weren't before that are not in a "creative" position. These crews need transportation, to be fed, to be housed, have clean facilities on set or location...not to mention plumbers, carpenters, and other skilled labor to make it all happen. Bringing the press, more positive, national coverage for the state all sounds like a great idea to me!
ChelseaBob
Fri, Sep 17, 2010 : 2:21 p.m.
The film subsidies are a scam and a waste. Just read the Free Press story. Imagine if we took that $100 million and used it to subsidize modernization of manufacturing facilities? We would create thousands of permanent middle class jobs. But that's not sexy enough for most politicians. At least Snyder has the courage to speak the truth, even if it doesn't help his poll numbers. That's refreshing.
Sherry Knight
Fri, Sep 17, 2010 : 2:20 p.m.
Before I weigh in, swayed because I've seen the benefit of these incentives first-hand, I'll ask a question. How much did the state "pay" in incentives vs. the $350 million that was brought into the state?
xmo
Fri, Sep 17, 2010 : 2:11 p.m.
The poll question was not stated well. It should ask: Should the State continue to pay film companies to film in Michigan? Please do an article on: How much does each film job created in Michigan cost the taxpayer?
mike from saline
Fri, Sep 17, 2010 : 1:42 p.m.
why not tax incentives for all Michigan buisness's? That would be my position.
evenyoubrutus
Fri, Sep 17, 2010 : 1:01 p.m.
It's too bad that a gubernatorial candidate makes an accurate statement but he potentially loses votes because of how uninformed the public is. These film incentives are given to companies that bring in film crews and actors who are from other states that receive the payback from the state government, then leave with the money and spend it elsewhere. True, a minimal amount of cash is being spent locally at restaurants and hotels by the film crews, but the result is a net-outflow of cash from the state. And the worst part is because of the union guidelines, these production companies aren't hiring from the local workforce; they are all being brought in from the outside. So the incentive creates a minimal number of jobs and loses money for the state. Way-to-go politicians.
Mikey2u
Fri, Sep 17, 2010 : 1:01 p.m.
Just another reason to vote for Democrats in November
Nathan Bomey
Fri, Sep 17, 2010 : 12:30 p.m.
Free Press just published this story about a report from the Senate Fiscal Agency analyzing the effectiveness of the film incentives: http://www.freep.com/article/20100917/NEWS06/100917048/Movie-subsidies-a-big-loser-for-Michigan-taxpayers--study-shows Excerpt: >>The state Treasury doled out $37.5 million in subsidies in 2009 and is expected to distribute about $100 million to the makers of TV and film productions in 2010. But the estimated additional state tax revenue generated by film-related economic activity comes to only $3.7 million in 2009 and $10.3 million in 2010, the report found. >>>An analysis of movie and TV job creation by the agency found that the average cost to the state per full time job in 2008 was $186,519, and $193,333 in 2009.
A24Evr
Fri, Sep 17, 2010 : 12:10 p.m.
Rick you had my vote 100% until reading this commment. But guess what, you just lost it!
Nathan Bomey
Fri, Sep 17, 2010 : 11:45 a.m.
FYI I just deleted a line that I had mistakenly left in the story due to a copy-and-paste error.
RobertinSaline
Fri, Sep 17, 2010 : 11:32 a.m.
The film incentive thing sounds great, but is a big problem long-term. According to Department of Treasury data, the payout to film companies by the State of Michigan is equivalent to 7% of the taxes that businesses pay as Michigan Business taxes. If Michigan gave EVERY business a 7% DECREASE in their taxes, alot of people would have more in their pockets. Paying out so much to the film industry is simply not sustainable. It sounds cool to have a film come here, but I think most people (and our kids who will eventually hopefully live here) would rather have 7% more in their pockets.
Lokalisierung
Fri, Sep 17, 2010 : 11:32 a.m.
Oh Rick, bad move.
rusty shackelford
Fri, Sep 17, 2010 : 11:24 a.m.
Classic right wing technique: do whatever possible to eliminate government programs that are actually helping people (and, contra Snyder, encouraging capital investment), and then turn around and say brain dead things about how government is incompetent and can never do anything right.