Tear Down This 'Film Industry' Facade

(The following is an edited version of a letter to the editor of The Detroit News in response to their editorial "Ours: Keep film credits for now." The Mackinac Center and others have written extensively on this subject and disagree with the notion that the Michigan Film Incentive program is a policy lever necessary to the economic well-being of the Great Lakes State.)

Your defense of keeping the state film subsidy program to give the industry more time to develop here misses the mark on three levels ("Ours: Keep film credits for now," November 6).

First, The News wrongly assumes that Michigan government can actually build a film industry. It cannot. It will only erect a facade that lasts just as long as the massive subsidies keep flowing. Worse, as demonstrated by a recent Senate Fiscal Agency report, other tax revenues generated by subsidized film activities will never cover the program’s costs.

That state economic development programs routinely fail to deliver on their promises should be no surprise to The News, which has often and correctly editorialized against these programs. Empirical evidence, economic theory and simple logic have repeatedly proven that such programs don’t yield a net increase in employment on balance.

Second, The News makes a factual error by continuing to describe the film industry incentives as "tax write-offs." In fact, as the Senate Fiscal Agency explained in detail, they are cash subsidies, redistributing income from Michigan families and existing businesses to a handful of film producers.

Lastly, The News frets that any "abrupt changes just two years into the process" would send negative signals about the state’s ability to complete what it starts. When what it starts is counterproductive and wasteful, that’s a good thing.

Ending the handouts would send a signal that this state is done playing games with ephemeral and failed "economic development" programs, and instead will focus on a real economic growth agenda, including across-the-board tax relief, labor law changes and other regulatory reforms.

Permission to reprint this blog post in whole or in part is hereby granted, provided that the author (or authors) and the Mackinac Center for Public Policy are properly cited.