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Posted on Thu, Jul 14, 2011 : noon

State Senate eyes new plan to save Michigan's film incentive program

By Peter Luke

A new proposal to save Michigan’s film incentive program scales back the current program that expires at the end of the year and provides more money for productions that use Michigan workers and facilities.

“I don’t want to pull the rug out from under the industry,” Senate Majority Leader Randy Richardville, R-Monroe, said Wednesday. “Let’s put a structure together that’s competitive with the rest of the country, and then decide if we can afford to keep the industry.”

Gov. Rick Snyder opposed the old program that effectively provided state grants equal to as much as 42 percent of a film’s Michigan production costs. One of the most generous in the nation, the incentive made Michigan an emerging hub for movie making. Now the state is losing productions to its competitors.

That program’s current framework expires at the end of the year along with the Michigan Business Tax. Snyder did agree to fund $25 million in new film grants for the next two fiscal years. Movie proponents say that approach is neither large enough nor secure enough to keep the state competitive for projects.

Richardville’s proposal would start out as a five-year plan funded through annual appropriations. He isn’t averse to spending the $100 million annually the state is roughly spending now.

“I think we want to show that there is a commitment to the industry over a period of time,” he said.

His plan would provide grants equal to:

- 27 percent of direct production expenditures in Michigan.

- 30 percent of Michigan personnel expenditures through 2015, when it would dip to 25 percent.

- 27 percent for qualifying personnel costs for non-Michigan workers, which would drop to 12 percent in 2015.

Productions at Michigan-owned studios would receive a bonus of 2 to 5 percentage points. Commercials and video game production, typically the product of Michigan-based firms, would also qualify for funding.

“We are trying to provide incentives for Michigan businesses, a re-educated Michigan workforce and also the (production) infrastructure in Michigan,” Richardville said.

Richardville said backers of the program, including those in the industry, would have to make the case to Snyder in particular that it makes economic sense.

"We're going to have to put pencil to paper and show that there is a real good return for years to come," he said. "That's what I've challenged the industry to do, not market it so much, but analyze it and give us some stuff that a business decision maker would be able to deal with."

Contact Peter Luke at 517-487-8888 ext. 235 or email him at pluke@boothmichigan.com.

Comments

Tailgate Jim

Fri, Jul 15, 2011 : 1:58 p.m.

Maybe this will quell Mitch Albom's tirates now.

Elaine F. Owsley

Fri, Jul 15, 2011 : 12:29 p.m.

Just file the cost under "promotion of the State of Michigan", it certainly finds a place in that category.

deb

Thu, Jul 14, 2011 : 8:18 p.m.

This is why no one in the film industry hires michigan workers, because under this plan they only get a 3% bigger tax break to do so. The upper level production people care more about working with people they know, then the 3%.

deb

Thu, Jul 14, 2011 : 8:16 p.m.

Michigans film incentive program needs to end now. It is truly terrible. I worked in the Michigan film industry for a couple years. A large amount of the workforce is flown in from other states , (so lets give away michigan tax money to support paychecks (27% of them) for the citizens of other states) especially when it is a studio film. (Additionally, when tickets were booked through anywhere in Michigan, i.e. a travel agency in Mi., they qualified for the tax credit. The tax credit pays for airline flights for workers from other states to come here and take advantage of Michigan taxpayer monies.) Movies are shot out of the backs of semis and can be shot anywhere. The movie industry will always go to where it can find the best tax break. A tax break for almost any other industry, that is transient or can be done over the internet, would create immediate jobs here. For instance, law firms in NYC, Chicago and other large markets have been shifting some of their workforces to Pennsylvania and other states because of cheaper costs of living in those areas. The firms do this so they can pay employees a cheaper wage. If Michigan were to give legal employers a 42% tax break, there would be a lot more law firms looking to employ lawyers in our state. If we really want to stop our talented people from leaving the state, why not create tax credits for legal employers, engineer employers, software developers, etc.? Why give a tax break to an industry where a job requires very little to no education when the same funds could be used to attract real top level "talent."

Michael K.

Thu, Jul 14, 2011 : 6:20 p.m.

"It's like throwing money at a good looking girl. As soon as someone comes along with more money, or yours runs out- she's gone!" That is the problem with **ALL** business tax incentives. You have different states and cities competing to give big breaks to land a business, sometimes with little or no guarantee of the number of jobs created. It should probably be banned - it cimes close to being a bribe for annindividual company to locate there Until then, we also have to do it to be competitive. Take a look at the incentives Toyota received from different state and local offices to locate their plant in certain locations. From Wikipedia: "Toyota has received a little over a billion USD in federal, state, and local government tax subsidies and incentives including: * $323.9 million in subsidies for the plant in Tupelo from Mississippi taxpayers.  * $371 million in subsidies for the Georgetown plant from Kentucky taxpayers. * $227.5 million in subsidies and tax incentives for the Tundra plant by Local, Texas, and U.S. taxpayers."

deb

Thu, Jul 14, 2011 : 8:12 p.m.

except those industries dont do there main work from the back of a truck. They cant simply uproot a factory, they have to build a new one. The movie industry can just pack up their trucks and leave.

Chip Reed

Thu, Jul 14, 2011 : 4:56 p.m.

Michigan was always important in film production in the old days. Jam Handy did a lot of training films for us in WWII and there was always lots of skilled people working in film production around the New Center area and later in Southfield.

Bogie

Thu, Jul 14, 2011 : 4:47 p.m.

Please, just pull the plug already. It's like throwing money at a good looking girl. As soon as someone comes along with more money, or yours runs out- she's gone! Michigan doesn't need another broken heart.

1bit

Thu, Jul 14, 2011 : 4:14 p.m.

They need to run a Pure Michigan ad with each movie or at least prominently display "MADE IN MICHIGAN" (yes, all caps) with each movie subsidized by Michigan taxpayers.

capersdaddy

Thu, Jul 14, 2011 : 5:24 p.m.

in the credits of "Scream IV" - that's exactly what they did, "Filmed entirely in Michigan".

mojo

Thu, Jul 14, 2011 : 4:06 p.m.

Why not tie some strings to the film credit - Let the state share in the movie profits - say 1% profit sharing after film costs are covered - everyone wins and Michigan doesn't just 'give' away money for some shadowy jobs that vanish after the movie making is over.

SonnyDog09

Thu, Jul 14, 2011 : 5:03 p.m.

Given "Hollywood Accounting", adding 1% profit sharing would result in what we get back today: nothing.