Dumbest idea ever is coming to an end

Make a movie in Michigan, recoup 40 to 42% of your costs. Someone esplain to me how subsidizing Hollywood benefited Michigan?

“It painted Michigan in a good light. You could shoot Michigan. It’s good advertising for Michigan to have that,” says Guenther.

Remember how GREAT it painted Michigan in “Transformer 2”? And I bet everyone wanted to come to Detroit after watching “Gran Torino.”

Crains Detroit Business:

The nonpartisan Senate Fiscal Agency report released Friday says about $37.5 million in credits during the 2008-09 fiscal year reflected nearly $98 million in private spending. But nearly half of the spending left Michigan and didn’t contribute to economic activity in the state.

The report estimates the additional economic activity sparked by the credits raised less than $4 million in additional tax revenue for the 2008-09 fiscal year.

Why should the average Michigan taxpayer subsidize Hollywood? Last year, Michigan taxpayers paid out $163 million.

The org estimates that in its first year, the incentive program brought in $125 million worth of production spending, followed by $223 million in 2009. Last year, the council says it authorized $163 million in incentives and that 48 productions brought in about $300 million.

How much of its investment Michigan’s incentives have ultimately returned to the state remains a subject of contention.

I’m a simple person. The movie industry was told that it would be able to recoup 40-42% of it’s costs. BY THE TAXPAYERS OF MICHIGAN. There was no end to this gravy train, and the idea, I suppose, was that you would build up the industry in Michigan and then take away the credit some time in the future.

At which point, the movie industry would have done what? Left. The studios weren’t putting roots in Michigan. They were letting Michiganders build studios, from whom they would contract work in order to get the subsidy. Once the subsidy was gone, they would simply move on to the next state that’s taken on the sucker bet. Or perhaps they would have moved when some other state upped the subsidy to 43%. Critics of Michigan Governor Synder’s decision to end the subsidy say there is dancing in the streets of New Orleans, which has a 30% tax credit.

In the past eight years, Louisiana’s generous tax credits for filmmakers have helped lure to the state such productions as “The Curious Case of Benjamin Button,” “The Expendables” and “Welcome to the Rileys,” as well as the HBO series “Treme” and “True Blood.”

Even though these productions and dozens of others have shown off Louisiana and provided jobs in front of the camera and behind the scenes, a new study concludes that tax credits in Louisiana and other states are a waste. The money lost through credits isn’t made up, the study says, and the local jobs the film industry spins off are generally low-paying positions that don’t build the economy.

It is ironic that a business that usually pushes the “social responsibility” line needs to get taxpayer hand-outs in it’s own industry. Ala – Michael Moore:

Moore’s acceptance of the Michigan film incentive subsidy is troubling because he has grown wealthy railing against corporations and capitalist institutions — such as Wall Street — for enriching themselves at the expense of the little guy and taxpayers.

In the trailer for “Capitalism: A Love Story,” Moore shows up on Wall Street and says, “…we’re here to get the money back for the American people…” This is in reference to the high-profile bailout of big banks (and other institutions) by the federal government. By accepting a state subsidy, Moore, who shows disdain for private, for-profit businesses raiding the pocketbooks of Americans, engages in this very practice himself.

The mind wobbles.

Mitch Albom is none too happy:

And this is where Snyder’s philosophy is built on wobbly legs. As a man with no public service history, he may only view the world like an executive: make it cheap for me to operate.

Mitch, isn’t that the view taken by the movie producers? Those folks (probably with no public service history) deciding they’re going to move to Louisiana for their next flick where it’s cheap for them to operate, because those suckers are going to give them back 30% of their production costs?

Forty-four states currently have film credit dealos. The Mackinac Center:

The Tax Foundation did a study of film credits nationwide and found that the incentives “often escaped routine oversight about benefits, costs and activities” and that “spurious research” was common in the promotion of film tax credits. For example, in Pennsylvania, one study concluded that the film tax credit produced a net benefit of $4.5 million, but did so using the assumption that any business interacting with the film industry would not have otherwise existed if not for the film credit.

So why?

A mostly anonymous local businessman who must pay all his taxes and make payroll every week is a poor match against a silver screen celebrity who signs autographs while standing on a town street corner for a day or two.

“It’s a feel-good argument almost,” Robyn said.

“State governments are competing to pay film production companies increasingly large amounts to shoot TV shows and movies in their states,” Bill Ahern, spokesman for The Tax Foundation, wrote in an e-mail. “Most of the payoff consists of super-generous, resellable tax credits declared on corporate income tax returns, but forgiveness of sales taxes is common, too. The Tax Foundation urges states to compete by lowering tax rates for everyone, not by granting targeted credits to one favored industry. We suspect that joint public appearances by politicians and movie stars are one of the major reasons these tax giveaways exist, but even the few jobs created by a film production are mostly temporary and contribute little to the state economy.

At it’s core, it is one more example of the government picking the winners and losers. It’s not capitalism. It’s cronyism.

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10 Comments on “Dumbest idea ever is coming to an end”


  1. I do wonder what Jeff Daniels’ take is on this, since he has spent a lot pushing for business in Michigan.

    Moore…we aren’t surprised, are we??

  2. Car in Says:

    the story.

    And, another little bit:

    The state spent about $100 million in the 2009-10 fiscal year on the incentive. As a result of the film productions — including locally filmed movies like Hilary Swank’s “Conviction,” for example — the state got an influx of $10.3 million in additional taxes, according to a Senate Fiscal Agency study released in September.

    Film companies directly hired 355.5 full-time workers in 2009, activity that resulted in a total of 1,542.2 overall full-time jobs in Michigan, the agency estimated.

    Although the film incentives result in a net loss in tax revenue, advocates argue the job creation and the film industry’s attractiveness to young people made the incentives worthwhile.

  3. Jay in Ames Says:

    Iowa just went through a big corruption trial for this type of activity. Lots of the employees of the state agency getting huge paychecks, and spending money on things they shouldn’t. Tens of millions wasted.

    Now they are wondering who will resurrect the program. Yeah, let me know how that works out, with a Republican governor, now.

  4. Dr. Detroit Says:

    Transformers 2 was not shot or set in Michigan you dolt!

  5. Car in Says:

    What movie did they use the central station for a fight scene?

    Wasn’t that Transformers?

  6. Car in Says:

    OH, it was.

    The station has appeared in several films.[4] MCS was used for scenes in the movie Transformers (directed by Michael Bay) in October 2006. In January 2005, it was used as a location set for the movie The Island (also directed by Michael Bay`). In September 2002, extensive closeups and fly-by shots were featured in the movie Naqoyqatsi. The 2004 film Four Brothers opens with the main character driving his car along the front of Michigan Central Station towards Michigan Ave. The building has been used in some of Eminem’s work, including the title sequence of the movie 8 Mile and his music video for the song “Beautiful,” during the beginning of which the building features prominently. Most recently a scene from the ABC crime drama Detroit 1-8-7 was shot and set inside the station.

    The idea that the film credits would some how enhance Detroit’s image was the idea I was attacking.

    And what did they do? Use an abandoned building. That enhanced our image how?

  7. Svenster Says:

    The film industry and their dupes in government never fail to entertain… From today’s Detroit News:

    “Allen Park, like many other communities across the state, is dealing with decreasing property values and falling tax collections. Moreover, the city gave $1.2 million to a movie studio, Unity Studios, that later bolted for Detroit.”

    From The Detroit News: http://detnews.com/article/20110223/METRO01/102230400/Allen-Park-to-lay-off-entire-fire-dept.#ixzz1EoM1k6yc

  8. Car in Says:

    Yea – that story just epitomizes everything wrong with government.

    They’re out of money, so they get rid of one of the FEW functions they legitimately have.


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