Michigan Proposes $250 Billion in Film Tax Credits; Predicts Imminent Recovery

April 1, 2010

April 3, 2020

Michigan Gov. Steven Seagal announced yesterday plans to expand the state’s film tax credit program, saying it will create jobs and boost tax revenue. The bill would expand the current subsidy from a $120 billion in 2019 to a little over $250 billion in 2020. The plan has received unanimous support from Michigan lawmakers.

Film tax credits have been around since around the turn of the century, when state lawmakers started paying movie producers to film in their state. The idea quickly spread and within a few years almost every state was offering generous film incentives, battling each other for a limited number of film productions.

“We are under siege here,” said Gov. Seagal, speaking from the premiere party for the state-funded Beethoven 8: Puppies Galore. “At this point, if you’re not giving away over $200 billion a year, you’re just not in the game. Frankly, we can’t afford not to pass this bill.”

He added, “All my old movie pals back in Hollywood think it is a great idea.”

Over the last decade the state has spent hundreds of billions of dollars to win over TV and film productions, on average devoting half of its annual budget to film tax credits. The state has pioneered the establishment of “movie star oases,” upscale exclusive areas with free spas, country clubs, golf courses, coffee shops, and gyms, in hopes that movie stars and film producers would relax there whenever they weren’t filming.

“53% of our workforce is employed in film or TV production,” Seagal said. “We need this film tax credit program in order to keep those people employed and paying taxes.”

Dave of East Lansing, who requested that his full name not be used because he is employed by one of the hundreds of film studios located there, argues that the credits may have a negative effect on other state services. His son Tommy, for instance, has his arm in a cast after his school’s only remaining swing broke during recess last month.

“My son is excited to go back to school,” Dave said. “Friday is his turn to sit at the desk and use the math book.”

Gov. Seagal acknowledged these difficulties at the press conference.

“In tough times, we must prioritize. This state needs jobs, and the only way to strengthen our economy is to make sure that every film made in Michigan turns a huge profit, no matter how many people go to see it. Everyone must share in this effort.”

To fund the tax incentive program, Michigan has raised its sales tax nine times in recent years and its “Single Business Tax” twelve times. The film industry has grown considerably; other industries have vanished. Officials deny that the tax burden is high, citing the low taxes paid by the film industry.

Seagal last week signed into law a sales tax holiday to provide relief from the state’s high sales taxes. The holiday will apply to Blu-ray copies of films and television programs that were funded by Michigan’s film tax credit program.

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