Senate Examines Film Credit

By: Meaghan M. Norman Email
By: Meaghan M. Norman Email

"Filmed in Michigan" is becoming a popular movie credit, because of the state's generous tax break to encourage movie makers to work here.

But at this point the state appears to be spending more to get films made here, than it's taking in.

On Wednesday a senate committee heard arguments, both for and against, to try and figure out if there is a long term benefit to the film tax credit.

The tempting tax break has kept the cameras rolling in Michigan but some say now might not be the time to spend money on tax breaks for the tv and film industry when the state and taxpayers are in such a financial crisis.

During the Senate Financial Committee meeting Senator Nancy Cassis (R-Novi) questioned if the film credit does more than benefit a handful of people and wondered if the money could be used elsewhere or even perhaps give taxpayers a break.

David Zin, an economist for the Senate Fiscal Agency testifed that there is postive private sector growth but the public sector --- the state isn't seeing a benefit just yet.

"The money spent on the film credit is money that either could be spent on an alternative credit or alternative tax reduction or alternative spending and other spending should generate jobs," said Zin.

But the film industry, in particular the Michigan Film Office thinks differently.

"Thousands of Michiganders are being put to work. Millions are being spent on local businesses," said Carrie Jones, the director of the Michigan Film Office. "We want to grow the economy. Create jobs and protect the Michigan taxpayer dollars."

Michael Whittaker has benefited directly from the tax incentive program. He's the president and CEO of RSIG Security, based in Southfield. He is responsible for providing security for many of the movie crews that film in state. Whittaker also testified saying the nearly two and a half year old incentive hasn't matured yet but it's just a matter of time before the state see the kind of return that he has seen firsthand.

"The incentive has helped me turn my company around from the red and pushed it into the black. I've been able to hire 200 people a year so it's helping with our turnaround to stay in the state," said Whittaker. "[If it wasn't for the incentive,] we wouldn't be here. We may employ people for six or nine months but we are building something."

But the benefits of the big names and big crowds looking to boost local businesses may not be reaching full potential fast enough

"When will Michigan get its money back?" asked Sen. Cassis. The fiscal agency could not give a timeline. A report released on Friday detailed what the state has seen in terms of revenue since the credit started back in 2008. Zin and David Olson, the director of the Senate Fiscal Agency said that it's likely both the private sector growth will continue but also the decline in revenue. But, only time will tell.

"There's a private benefit and there's a public cost," said Zin.

"It didn't take into account the number of young people who are staying here and the small businesses that are able to stay open because of these incentives -- hotels that are being filled to capacity. Instaed of laying off they're hiring," said Jones.

The state has to weigh whether the private sector benefit is enough to overcome the large losses of statewide revenue.

"So it's not so much of 'some jobs are better than no jobs' it's which jobs and how many?"

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  • by Sans on Sep 23, 2010 at 01:00 PM
    Why would we do something that would make some money for the state? Thats just not what our state government is about. They do not understand that this is a business deal, and we are suppose to make money on it.
  • by Ricardo Location: Lansing on Sep 23, 2010 at 07:00 AM
    All of these free ride programs for businesses end up costing the taxpayers in the end. There are so many exemptions from paying any tax that is no wonder the state is broke. Someone has to pay the bills, and it is the average Jane or Joe that gets stuck with the tab because they don't have an exemption to hide under. Just eliminate all free rides. Everyone pays something. The little guy would get relief, the the big guys would pay something to help run the government. But if all businesses paid, instead of ducking under this or that exemption, the cost wouldn't be that great to them. Thank you Ricardo
  • by Anonymous on Sep 22, 2010 at 05:08 PM
    Eliminate the SBT, and income tax and you would see a huge growth in or people filing in Michigan. TX and FL has huge number of people living there and they have no income tax.
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