Part of Republican Gov. Rick Snyder’s recently proposed budget cuts includes the termination of the popular Michigan film incentive. According to Snyder, this cut was just one of the many tax incentives that were slashed in order to “level the playing field.” That creed may be applicable to other industries within the crippled Michigan economy, but to the film industry, this cut won’t level the playing field as much as it will potentially eliminate it.
Implemented in April 2008, the Michigan film tax incentive has not only boosted the state’s economy, but it has also singlehandedly brought a new industry to Michigan. The credits gave a substantial amount of tax incentives to those in the movie industry interested in filming in Michigan. This tax break — the largest of its kind in the United States — covered up to 42 percent of the production costs involved with the filming of a movie. In its three-year existence, the plan has resulted in more than 135 productions and has cost the state approximately $304 million, only $96 million of which has been paid out, according to a Feb. 17 Free Press article. This, compared to the more than $649 million in revenue that the tax break has generated, is more than enough reason to question its recent termination.
The recent slash of the film tax incentive will inevitably devastate the currently booming Michigan film industry. At a time when most industries in the state are failing, the film industry has become what some have begun to call “Hollywood North.” In its brief existence, this blossoming industry has created more than 6,763 film production-related jobs, along with more than 4,000 jobs for extras, according to the Free Press. While abandoned industrial buildings continue to plague the state, a former Pontiac car plant is being filled with the new, state-of-the-art $80 million Raleigh Michigan Studios, which plans to open this spring. This massive infrastructural improvement, along with two other smaller studios already in operation, is aiding the Michigan economy.
The state must also recognize the restaurants, hotels and countless local businesses that have undoubtedly benefited from the tax incentives. The movie sets give an incredible economic and morale boost to cities, as witnessed in Ann Arbor during last week’s filming of George Clooney’s coming movie, “Ides of March.” This recent production briefly employed many of our peers and inevitably helped the local Ann Arbor community.
If Snyder wishes to implement much-needed budget cuts, he must do it in a reasonable fashion. Instead of examining the many Michigan tax incentives in a fine-tuned and reasonable manner, Snyder decided to blithely eliminate many of the tax incentives offered by the state. In some ways, these budget cuts are much needed, but the film tax incentive should be an exception. As President Barack Obama has repeatedly stated, we must make budget cuts “with a scalpel, not a machete.” The elimination of the Michigan film tax incentive fully exemplifies what the president is trying to prevent.