Sorry, film students — you’re not going to like what I have to say.

I know that on the surface, Michigan’s subsidies for the film industry seem like a really good idea. I know that all you prospective actors and screenwriters are thrilled that you can suddenly find work on movie sets without having to move to California. Maybe you even got to appear as an extra in a scene with Hilary Swank or Drew Barrymore, who both had films produced in Ann Arbor under the film subsidies. Even Ralph Williams, famed University English professor, got to be in a movie.

But all this movie-mania fun has a cost. The only reason that the filmmakers have temporarily located to the Great Lakes state (or the “Free Money” state, as movie executives are probably referring to Michigan in their meetings) is because we’re paying them to hang out here. And as soon as the money runs out or some other state offers slightly better subsidies, the film industry will dump us. Hollywood will come away a little richer and Michigan none the wiser.

Michigan has been paying movie stars to be its friends since April of 2008, when the state legislature approved the country’s most generous film incentive program — a 42 percent tax rebate on all in-state expenses for movies being filmed in Michigan. The idea was that Michigan needed to produce something beside cars, so why not make it movies? Film crews would frequent local businesses like hotels and restaurants, create jobs and help diversify the economy. And with almost thirty films produced in Michigan last year and at least forty more in the works, movie executives are clearly enjoying all the free cash – about $48 million in 2008 and expected to reach $200 million in the next two years, according to a June 4 Detroit News article.

But despite all the money Michigan has spent on the movie industry, this friends with benefits relationship is only going one way. Last February, Michigan State University published a study on the economic impact of the subsidies. The study found that the incentives had created 2,763 jobs that lasted about 23 days — the usual duration of filming for these movies. This translates to about 254 year-round jobs. That’s right: 254 jobs for $48 million.

The study then goes on to assert that based on its economic models, a “multiplier” effect will indirectly produce more jobs down the line. But Michael LaFaive, a fiscal expert writing for the Mackinac Center for Public Policy on June 12, pointed out that these economic models didn’t take into account what the incentives cost the state. “If the proponents of film subsidies attribute a multiplier effect on the benefit side, they must also acknowledge the same effect on the cost side,” he wrote. LaFaive stressed that a similar multiplier on the costs side might very well have discovered a net loss of jobs and a diminishing of the economy.

And it isn’t just fiscal experts who are saying this. Kathy Hoekstra, also of the Mackinac Center for Public Policy, reported last July that at a Traverse City forum on the film incentives, Michael Moore directed a question to Michigan Film Office Director Janet Lockwood. Moore observed that, “These are large multinational corporations… Why do they need our money, from Michigan, from our taxpayers, when we’re already broke here? I mean, they play one state against the other, and so they get all this free cash when they’re making billions already in profits.”

Moore is making a great point here. Other states, including Louisiana and New Mexico, were offering film incentives before Michigan was. Michigan essentially stole their thunder, but there’s no reason that another state won’t turn around and do the same thing to this state. Then we won’t even keep those 254 jobs — and the state will be out hundreds of millions of dollars.

And when I say the state, I’m really talking about the state’s residents. The money for the film subsidies doesn’t come out of a magic box — it’s being taken out of the paychecks and profits of struggling Michigan workers and small businesses. And while it may be true that local communities who were lucky enough to land a movie deal are benefiting, everyone else in the state can barely afford to live here.

Besides, when free market economists and Michael Moore agree on something, doesn’t that mean it has to kind of be true?

Michigan is facing a $2 billion budgetary deficit this year. Yeah, it’s cool that movies are being filmed on campus. But the state can’t afford the bribes it takes to keep the film industry here. As the state legislature attempts to come up with a passable budget in the next few weeks, I hope they can summon the courage to kick the film executives off the state’s couch — before these moviemakers leave town with even more of our millions.

Robert Soave is the editorial page editor. He can be reached at rsoave@umich.edu.

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