A tighter budget and a maze of red tape might keep celebrity-stalkers on campus from encountering their favorite movie stars on the streets of Ann Arbor.

The budget of the Michigan Film Office, the state’s distributor of film tax incentives, was slashed to $25 million for the 2012 fiscal year — down from $115 million in fiscal year 2010. The reductions were included in Republican Gov. Rick Snyder’s budget, which was passed by the state House and Senate and took effect Oct 1.

The new incentive system will grant a film a set amount of money based on the Film Office’s criteria, which evaluates the number of jobs the film would create and the percentage of the production filmed in Michigan, among other factors. Under the old percentage-based system, films could be awarded up to 42 percent of their total operating costs.

Ryan Kazmirzack, a spokesman for Snyder, said the administration sought to establish a grant-based system because the potential cost of some films under the percentage-based system made budgeting the program too volatile.

“If the film industry did $1 billion worth of business in Michigan, then the taxpayers would have to come up with $420 million to write them a check,” Kazmirzack said. “(This) meant the more successful we were as a state, the more it was going to cost taxpayers. It was impossible to budget for because (we did not) know how much it was going to cost.”

Kazmirzack added that the new program saves taxpayers money and gives the Film Office the ability to negotiate the appropriations it doles out.

Michelle Begnoche, spokeswoman for the Michigan Film Office, said the office cannot start accepting applications and distributing money until state legislators define the parameters that films can use the grants for. Though the office’s new budget is 78 percent lower than last year, Begnoche said the transition to a smaller budget is manageable because the office had an “unofficial cap” on spending in 2011.

“Under the tax credit system, there is no cap,” Begnoche said. “However, when the governor made his budget proposal, his directive to our office was that we work within $25 million (in 2011). So we’ve already been doing this for a year.”

Even with a significantly smaller budget, the office has not seen a drop in film applications. Begnoche said the Film Office has already approved 21 projects to be filmed next year, and she isn’t concerned that filmmakers will stop coming to the state.

“Anytime you have $25 million to offer to folks, there are people that are interested,” Begnoche said. “Our goal is finding the best projects and attracting the best projects in Michigan.”

Over the summer, students and Ann Arbor residents were star struck with frequent sightings of actor Jason Segel and actress Emily Blunt, who were in town for the filming of the movie “The Five-Year Engagement,” that will premier in 2012. Earlier this year, actors George Clooney and Ryan Gosling made appearances in Ann Arbor to film the recently released “The Ides of March.”

Though the Michigan Legislature passed the state budget earlier this year, disagreement over the impact of the reduced Film Office budget remains.

State Rep. Jeff Irwin (D–Ann Arbor), who supported the film tax credits, said the additional job creation and spending brought on by increased film production in the state provided much-needed assistance to Michigan’s economy.

“We saw a tremendous amount of (economic) activity in Ann Arbor and Washtenaw County,” Irwin said. “The biggest impact is going to be hotels and restaurants because they were seeing a tremendous (increase) in business due to the tax credits.”

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