Michigan Senate Advances Film Tax Credit Extension Bill
October 22, 2014
Michigan’s Senate approved a bill yesterday to extend the state’s film tax credit program, which was limited and reduced in 2011 and set to expire in 2017. It’s now up to the House to decide whether to proceed. From Mlive:
The bill would eliminate a 2017 sunset on funding for the film credit program, revise funding caps starting in 2015 and require employer organizations providing labor to be organized under Michigan law.
The state’s contribution to a film’s production and personnel expenditures would be capped at 25 percent, with another 3 percent for production expenditures at a qualified facility or 10 percent for expenditures at a postproduction facility.
Governor Rick Snyder (R) has consistently sought to cap the program at $25 million, but the Legislature doubled the subsidies to $50 million last year. The pre-2011 Granholm program was uncapped and Michigan taxpayers were subsidizing Hollywood productions at well over $100 million annually.
A big reason why Michigan pared the program back was a 2010 state-commissioned study that found the incentives cost $117 million and created 1,039 full-time equivalent jobs, for a cost of $112,800 per new job. Due to the nature of the film industry, most of the jobs are temporary and transient, with production companies using out-of-state labor to fill many positions.
Since then, California has tripled its film credit spending to over $300 million per year, and New York is over $400 million per year. To do battle with these states requires writing enormous checks to one of the most profitable industries in America. I would think Michigan has bigger priorities for its tax dollars than handouts for Hollywood.