Michigan has seen more than its fair share of movie stars recently. The state’s tax rebates for the film industry have brought television and movie producers to Michigan. But a recent report from the state Senate Fiscal Agency questions the benefits of the program. The report claims that the industry doesn’t provide the financial stability needed to revitalize Michigan’s economy. It also suggests that the majority of the money spent by the film industry doesn’t stay in Michigan. Though the film industry isn’t a sustainable source of revenue, the tax incentive should be continued to give Michigan’s economy whatever help it can get in a time of need.
Michigan’s film industry tax rebate is the highest in America at 42 percent. If the project doesn’t use Michigan resources and workers, the rebate drops to 30 percent. Since 2009, the incentive has brought several producers to the state. The movie “Gran Torino” and the new show “Detroit 1-8-7” are only a few of the recent projects filmed in Michigan. But the Michigan legislature isn’t convinced that the program is helping bridge the deficit, citing the nomadic nature of the film industry. With the gubernatorial election approaching, candidates and voters are scrutinizing the tax rebate. Rick Snyder sides with the legislature with his plan to phase out the incentive while Virg Bernero plans to keep them as long as they continue to create jobs.
The tax rebate has attracted a new and lucrative industry to our state in its time of economic struggle. The film industry’s presence creates new jobs and helps counter the state’s dismal unemployment rate. While the actors, directors and producers are filming they need food and a place to stay. Michigan’s restaurants, hotels and local businesses profit from the thousands of people who work on production sets. This ripple effect helps the economy at all levels, increasing the overall positive effect of the incentives.
The industry also provides a necessary transformation from dependence on the automotive industry. Abandoned warehouses and plants are put to use as film studios. Workers laid off from the auto industry are retrained in film positions. The industry is helping Michigan achieve an important economic goal — diversification.
But the SFA’s report was correct in saying that the industry isn’t going to stay in Michigan permanently. Once production is wrapped, the jobs it created will once again leave and there needs to be something to fill the void. It’s important that the legislature realizes this and doesn’t expect profits from the film industry to single-handedly solve Michigan’s economic issues. The film industry may not be sustainable, but it will help maintain the state while our economy changes and recovers. The state should continue the incentive to entice the film industry to work in Michigan as a stop-gap measure. But Michigan must continue to pursue other plans to improve and diversify the economy.
Profits from the film industry aren’t going to fix Michigan’s economy in the long run, but for now they are a nice source of revenue and support for local businesses. The state legislature needs to maintain the existence of tax incentives while still exploring other avenues for job creation.