Debate continues over film tax incentives

By Zane McMillin | Originally Published: 02/22/11 10:00pm |Modified: 02/22/11 10:01pm | No comments

Proponents of Michigan’s 3-year-old film incentives are fighting back against what they say is a reel problem.

Gov. Rick Snyder proposed to eliminate the incentives as part of his budget proposals released last week in favor of a $25 million cap on state spending in the industry.

The proposal — which would exempt any current commitments made to production companies — sparked a wildfire of praise and criticism.

Those in favor of the incentives — which offer a rebate of up to 42 percent of a production companies’ costs — say they induce job growth and economic prosperity. Detractors insist the credits have cost the state millions of dollars and have not created positive economic growth.

Each side of the argument has cited differing reports on the incentives’ economic impact. The latest study claims the incentives generate a more than $800 million economic impact. A report released last September by the nonpartisan Senate Fiscal Agency said the actual impact is a mere fraction of that estimate.

In any case, news of that part of the governor’s proposals had a seemingly immediate effect. The Detroit Free Press published a report Monday that said at least one high-profile project — an adaptation of superhero comic “The Avengers” — had nixed Michigan from possible filming locations rather than waiting to see the fate of the incentives.

The issue likely will pit state lawmakers against one another as they work pass a series of budget bills in the coming months.

State Rep. Mark Meadows, D-East Lansing, said he is in favor of capping the amount offered by the incentive program at $100 million. The $25 million proposed by the governor likely would only allow one or two films to be shot each year, he said.

“What we want is eight or nine films going on at any time in Michigan,” Meadows said. “There’s a lot of economic activity that takes place around the production of a movie.”

The proposal to eliminate the incentive was part of a number of proposals by Snyder to eliminate most of Michigan’s tax breaks and loopholes. House Speaker Jase Bolger, R-Marshall, is in favor of doing away with tax credits, spokesman Ari Adler said.

“The film credit certainly has been something that has been seen as a handout by many people,” Adler said.

Whatever comes of Snyder’s proposal, officials in the Michigan Film Office — which works to promote the state as a viable location for movie production — will adapt to any changes.

“We will work within this framework to make our incentives more Michigan friendly for homegrown businesses and entrepreneurs,” the office said in a statement.