Planting seeds for a new economy: Film tax credit needs longer trial
As chair of the Department of Theatre & Drama at the University of Michigan, and as a longtime member of SAG, AFTRA, AEA, and SDC, I deplore the current plan to cap film incentives in the state of Michigan.
In the face of the obvious loss of income for Michigan businesses, the loss of jobs for our citizens (especially our young people), and the loss of prestige for our state, this governor seems bent on ignoring a good thing when he sees it.
Priscilla Lindsay
Ever since I arrived in Ann Arbor to begin my stint as chair, theatre students have been knocking on my door, sitting down and telling me about their latest audition for a film, their Detroit agents, their roles in movies shot last summer, this fall, and projects coming up for spring and summer. The perception of this state as a place to make a living in “the biz” has changed. There is actual “work” here! Vince Mountain, associate professor of theatre in scene design in our department, was hired last summer as the set designer to work on the permanent sets for the first season of the new ABC drama, “Detroit 1-8-7.” He was able to get students hired on the project, and also saw colleagues being hired on several other feature films being shot in the Detroit area.
Vince says the amount of money he earned in one summer, plus the money he witnessed being spent locally at a variety of businesses (both on materials and labor), combined with the fabulous opportunity to work in the film industry convinced him of the positive and substantial impact the film incentive is having in southeastern Michigan. “Quite simply, there are jobs and resources available to a wide range of residents today that weren't here two years ago, and won't be here in the future without the incentive," Vince told me.
Janet Maylie, assistant professor and teacher of Acting for the Camera classes states: “The high profile professional opportunities in this state, on-site on campus and off, have been irreplaceable educational experiences, giving the students ‘real-life’ learning lessons in putting their film audition techniques to practice in actual auditions for professional work. Several students have been hired as principal players in union films working with actors such as Adrian Brody, Richard Gere, George Clooney, Philip Seymour Hoffman, and Ryan Gosling. This not only brings their classwork to the real world, but also it serves as a launching pad for their careers, right here in the state of Michigan.“ Film companies are required to hire Michigan artists and technicians, Michigan companies, in order to get the tax breaks. All this goes away when the incentives go away. Unemployment goes up. Revenues from state and municipal taxes go down. Because this makes so little sense, I wonder if the governor has another motive. Priscilla Lindsay is chair of the Department of Theatre & Drama at the University of Michigan. She has a master's degree in drama from U-M, worked as an associate professor at the University of Missouri-Kansas City, and the Missouri Repertory Theatre in Kansas City. Since 1999, Lindsay served as associate artistic director at Indiana Repertory Theatre, where she taught in the company's Summer Conservatory for Youth. She was appointed chair of U-M Theatre and Drama Department in the fall of 2010.
Comments
David Muzzatti
Mon, Feb 28, 2011 : 5:27 p.m.
My UNION manufacturing business has been in business in this state since 1965 & I NEVER recall ANY administration from Lansing doing ANYTHING for small businesses like mine. I pay a minimum of $10,000.00 in union benefits a month & have been doing so for almost 50 years. I break my back keeping up the historical standard of living of many Michigan residents. The mind control industry struts in & is to receive a blank taxpayer-funded check? The only thing I ever receive from the state of Michigan is periodic audits of various types & sizes & visits from MIOSHA. The only 'tax break' I get from the community I'm based in is IF I expand the facility & then it's only a break on the expanded portion. I urge Governor Synder to put his very best foot forward & design ways of helping out Michigan-based SMALL BUSINESS MANUFACTURING - It's that simple.
snapshot
Sun, Feb 27, 2011 : 11:12 p.m.
This tax credit costs taxpayers about a 100 million dollars while the film industry spends about 40 million in wages and purchases, or there abouts. Not a good deal for the taxpayers. The Chinese are buying auto parts companies, Evergreen shut down it's manufacturing plant to move it to China. Is Michigan crazy? They need to spport the industries that are here. Get costs under control. Work on infrastructure and quit giving our hard earned tax dollars away to folks who have no intent to set up a permanent shop. What a financial fiasco.
Mike
Sun, Feb 27, 2011 : 10:35 p.m.
The art and film industry is a luxury. It is as if Gov. Granholm had said to us "let them eat cake" with the tax credit. And, it's not a tax credit. It is a reimbursement of expenses. It is a fraud, a sham and a waste of taxpayers' money.
Z-man
Sun, Feb 27, 2011 : 7:03 p.m.
Greg is on the right path when he says that perhaps the money could be better spent elsewhere. But the key folks is, "There is no money!" If we don't choose to subsidize the movie industry to create a handful of temporary jobs, it's not as if we suddenly have $100 million we can now spend elsewhere. Don't spend it at all. Let the private and corporate taxpayers keep that money to spend and/or invest more efficiently as they see fit. If we create a low-tax, business-friendly, right-to-work environment, then perhaps companies will want to locate here without having to be paid to do so.
Greg
Sun, Feb 27, 2011 : 4:02 p.m.
Surprise, those who have an interest in the film industry love the subsidies, those who do not want to know if the money can not be better spent elsewhere. It is about getting the most bang for the dollars spent. Nothing I have seen suggests that giving state money to the film industry is the most cost effective way of providing jobs, taxes or much of anything else.
Z-man
Sun, Feb 27, 2011 : 4:48 p.m.
Greg is on the right path when he says that perhaps the money could be better spent elsewhere. But the key folks is, "There is no money!" If we don't choose to subsidize the movie industry to create a handful of temporary jobs, it's not as if we suddenly have $100 million we can now spend elsewhere. Don't spend it at all. Let the private and corporate taxpayers keep that money to spend and/or invest more efficiently as they see fit. If we create a low-tax, business-friendly, right-to-work environment, then perhaps companies will want to locate here without having to be paid to do so.
The Ben
Sun, Feb 27, 2011 : 3:44 p.m.
These debates always seem to boil down to "seen vs unseen." It's easy to point at the movie jobs and say "look at how successful this program is!" It takes deeper thought to look at this objectively and say, "while this seems good on the surface, the net result of this program is that it's costing taxpayers money and always will cost taxpayers money." The concept of "opportunity cost" is hard to explain to some people. Just because a program "creates jobs" does not mean that those very same dollars wouldn't be more beneficial to the economy if used in another, more efficient fashion. Sometimes I wish I was on the side that gets to use shallow arguments. But I'm not. It's a tough life.
Craig Lounsbury
Sun, Feb 27, 2011 : 3:39 p.m.
If we paid the auto industry 42% of their cost of doing business I bet every auto plant in North America would move (back)/ to Michigan. What if we gave a 42% rebate to the gas stations? We could all pay $1.95 a gallon again. Think of the economic impact of every auto plant in North America in Michigan where gas is only $1.95 a gallon. Its the best idea ever...its so good it almost seems too good to work.
StartupGeek
Sun, Feb 27, 2011 : 3:11 p.m.
I find it telling that those in favor of these tax credits for the film industry do not provide independent analysis of the ROI to support their arguments. We get it - of course many people are benefiting in the area; however, it's taxpayer money and there is very little return. Any industry would add jobs if you paid up to 42% of their cost structure. Unfortunately, the last administration made a bad decision that needs to be corrected.
Carla Milarch
Sun, Feb 27, 2011 : 2:59 p.m.
Film incentives have had a positive impact on a business sector in Michigan. See below for details on how: <a href="http://www.detnews.com/article/20110221/BIZ/102210382/Study--Every-dollar-spent-on-Mich.-film-tax-breaks-generates-" rel='nofollow'>http://www.detnews.com/article/20110221/BIZ/102210382/Study--Every-dollar-spent-on-Mich.-film-tax-breaks-generates-</a>$6-of-business How many other programs in the last 5 years can claim that?
StartupGeek
Sun, Feb 27, 2011 : 4:50 p.m.
Of course they had a "positive impact", but what was the economic ROI? The state writes a check for one dollar and gets how much back? If the above numbers are accurate, and let's assume all the $6.00 was subject to sales tax, the return on $1.00 is $0.36 - not a sustainable model. Also, the $6.00 of economic activity includes money not spent in the state - eg $2,000 first class ticket from LA to DTW.
Ron Granger
Sun, Feb 27, 2011 : 2:46 p.m.
According to the recent study by those in favor, the jobs that were created each cost of an average of $30,000 in tax dollars. The tax credit does nothing for me, or most people of Michigan. It just costs us a lot of money. I've said it before.. It makes me want to make a film just to cash in and have some fun, while the money is rollin'. Put this money into developing real businesses that will turn out economy around.
Soothslayer
Sun, Feb 27, 2011 : 3:46 p.m.
Yeah and what "real businesses" would those be? Most of our industry left and is in the right to work states. Other manufacturing is in Mexico, China. What's left? Service industries? No we replace items, we don't repair them. This was actually starting to do something.
Craig Lounsbury
Sun, Feb 27, 2011 : 1:57 p.m.
there is a difference between a tax deduction and a credit. Giving a business a deduction says "normally you owe me $100 a year, but for XX years I'll settle for $60/50/40", fill in the deduction. But to the movie industry we are saying "normally you would owe me $100 a year but instead I'm going to give you $42 a year." There is a HUGE difference between the two.
SonnyDog09
Sun, Feb 27, 2011 : 1:47 p.m.
This is another "temporary" subsidy that the folks that receive it want to last forever. There is nothing as permanent as a temporary government program. The film tax credit is welfare for Hollywood billionaires and millionaires.
johnnya2
Sun, Feb 27, 2011 : 1:33 p.m.
Its funny how many people talk about "fair" tax policy, when i reality the government has ALWAYS picked winners and losers based on tax policy. Pfizer was given generous tax abatements, the travel and tourism industry has an entire marketing and advertising budget paid for by your tax dollars. Charities are given preferential treatment as well. I say we can not afford tax payers who CHOOSE to give to charity any tax credit. How about the housing industry? The mortgage interest deduction is a clear example of picking an industry and propping them up. I never see the right wing crying about these tax deductions. Those who think taxes are what makes a business decide to locate somewhere are not in touch with reality I'll let Mitch Albom say it <a href="http://mitchalbom.com/d/journalism/7083/fight-smackdown-film-bizs-success" rel='nofollow'>http://mitchalbom.com/d/journalism/7083/fight-smackdown-film-bizs-success</a>
average joe
Sun, Feb 27, 2011 : 2:34 p.m.
It is not a "tax credit or a tax subsidy". It is a plain subsidy with no incentives to stay here for an industry that as a whole can afford to set down roots where ever it wants without help from any state.
My2bits
Sun, Feb 27, 2011 : 1:30 p.m.
The incentives ARE working. They have put money into our economy, which was sorely needed. They have created jobs and ignited infrastructure creation. Once we have studios in place and specifically skilled labor in place, we CAN be the state that lasts as a site for the film industry. We won't have to subsidize the industry forever, but if we cut the incentives off too early, we lose what we started. If we continue them long enough, we gain an industry. Please let the governor know he is being penny wise and pound foolish.
McGiver
Sun, Feb 27, 2011 : 1:01 p.m.
If Ms Lindsay was a finance, accounting, or economics chair she might have a different opinion about this . No one gives my business incentives to do business here. The state needs to provide a good environment for all business and not try to pick winners and losers.
Craig Lounsbury
Sun, Feb 27, 2011 : 12:57 p.m.
"Because this makes so little sense, I wonder if the governor has another motive." either that or because you are so intimately involved in the industry you haven't looked objectively at the bottom line.
Craig Lounsbury
Sun, Feb 27, 2011 : 12:53 p.m.
Here is a link to another study of film incentives in general It too indicates they are not worthwhile. <a href="http://www.cbpp.org/cms/index.cfm?fa=view&id=3326" rel='nofollow'>http://www.cbpp.org/cms/index.cfm?fa=view&id=3326</a> Some random thoughts I have... *A business that needs a 40%-42% subsidy does not have an acceptable business model. *How many Michigan businesses that have gone bankrupt would still be with us if the State had subsidized them to the tune of 40%-42%? If its a good plan for the movie industry its a good plan for the shoe maker. *The movie industry will always have one foot out the door as soon as a better deal comes along. The Oscars will never come to the Fox Theater. *There were 42 other states with the same idea we have, become "Hollywood Jr". Several of those states are bailing out on their programs because they don't work. *The only reason we are on top of the others at the moment is because we are the most generous. The industry can never be weened. If we try they will be gone. *The real money people are not committing much of anything to the state. The brick and mortar commitment is mostly Michigan folks hoping a praying the state will continue the subsidy forever.
braggslaw
Sun, Feb 27, 2011 : 12:03 p.m.
Just another special interest which is paid by the taxpayers in the state. A simple fair coporate tax will do more for this state than targetted subsidies for pet projects.
Soothslayer
Sun, Feb 27, 2011 : 3:42 p.m.
What people don't realize is there is NO other reason for anyone to film anything in Michigan. This program is an INVESTMENT to create an industry in the wake of the diminishing automotive one. If we can't afford it then what's the plan to get anyone to do anything in Michigan, what do we have to offer any industry that's already well established somewhere else? Give it a few more years to see if it can be self sufficient and then see if it can pay the program investment back. Q: Who from the established LA film empire would bother coming here to Michigan for the offer of "fair corporate tax"? (A: No one)
Joe Serwach
Sun, Feb 27, 2011 : 11:58 a.m.
Facts on film subsidies: <a href="http://ht.ly/44d8z" rel='nofollow'>http://ht.ly/44d8z</a> Please read and pass this on so people know the truth.