With the change of Governor may come a change in policy with regard to Michigan’s generous financial incentives for the film industry. Following, by way of background, is a clip from the Wall Street Journal:
…The set of the gritty cop show “Detroit 1-8-7” is one of more than 100 film and television productions that have flocked to Michigan in the last two years, the result of generous tax rebates. Producers have spent nearly $350 million in the state so far, a figure expected to reach $650 million by year’s end, up from $2 million in 2007, according to the Michigan Film Office. About 80% of these shoots take place in and around this iconic but much-maligned city, sprinkling a little stardust, optimism and controversy along the way.
Workers who used to build cars are learning to build sets. The entertainment sector is “a lifeboat as the auto industry adapts and restructures,” says Wayne County Executive Robert A. Ficano.
Signs of activity are everywhere. Hip-looking film-school grads on bicycles run errands in an empty warehouse that once served as a Chrysler distribution center and is now a cavernous 166,000-square-foot production studio for “Detroit 1-8-7.” Sets for the show, premiering on ABC Sept. 21, include a city morgue and a homicide unit with cluttered police desks and corkboards covered with mug shots…
The film incentive program offers up to a 42% tax rebate on any in-state expenses from rental cars, housing and food, or the cost of building a soundstage. Louisiana, by contrast, offers up to 35% in its highly popular program. After filming is completed, producers file a tax return, which is audited, and a check is sent out. Producers like to say that every dollar they spend in the state turns into $1.42…
The rebate has sparked criticism among lawmakers who argue the tax subsidy does not help the state bridge a $500 million budget deficit for fiscal 2011. Upcoming elections could threaten to reduce or even eliminate the incentive. Others argue that the nomadic film industry is not the best way to build stable, long-term growth.
Advocates counter that this argument misses the larger economic impact on small businesses like Just Delicious, whose scones were popular with Clint Eastwood and the crew on the set of “Gran Torino.” Or Small Plates, a chic restaurant in downtown Detroit that sees its business spike by 30% each time a production shoots downtown….
And, here, with the rest of the story, is a clip from AnnArbor.com:
…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.
I’m still inclined to say that the incentives are bad policy, but, having seen what the film industry did for Baltimore, I’m willing to keep an open mind. So, how about your? Will this impact your vote come November?
