A wave of panic is spreading among Michigan film subsidy
beneficiaries and backers. Gov. Rick Snyder’s budget plan calls for replacing
the state’s three-year-old incentive program (which the Detroit
Free Press notes paid out $60 million to moviemakers last year alone) with
a yearly allowance capped at $25 million.
Press’s main film subsidy cheerleader, Mitch Albom, sounded the alarm loud and
clear in a lengthy Feb. 20 column.
like fools,” Albom declared of Snyder’s plans, noting what he thinks is the
reaction from the rest of the nation. He then urged folks to contact their
state legislators (“Call them!”) and tell them to preserve the open-ended
further stoked the fire in a Feb.
24 article, and at a “Town
Hall meeting” in Livonia where he was the keynote speaker.
Taxpayers in Allen Park may
not share Albom’s confidence in the program after the city voted to lay off all
27 firefighters. As reported in the Detroit
Free Press, a failed film studio project is the reason.
“The decision to issue the layoff notices was attributed
to financial problems caused by the decision announced last year by Unity
Studios to leave the city for Detroit.”
The city and state offered a
sweet subsidy deal of its own to lure the promoter of a supposedly $146 million
project called “Unity Studios.” A Nov. 2010 Mackinac Center blog
post summarizes what followed:
“It’s taken less
than two years for the entire project to implode. The (ceremonial)
groundbreaking in August 2009 was followed by a tumultuous period which saw
Unity Studios founder Jimmy Lifton go from promising thousands of jobs at his
privately owned utopian 104-acre film studio and “retraining program,” to a
scaled down studio and film school on city-owned property, to near eviction and
eventually hightailing it out of Allen Park to set up shop in Detroit.”
If not for the promise of
more than $40 million in state and local tax
credits, investment and loans, Lifton may not have been so eager to push for
the project. Instead, because of the government-offered handouts, it appears that
a core government service that protects citizens — firefighting — may be sacrificed
due to the pipe dream of luring Hollywood to Allen Park.
Earnst and Young study claims a return of $6 on every tax dollar spent in
the state on film and TV production. Albom cites this as a reason for giving
$125 million to the industry, rather than the $25 million proposed by Gov.
Snyder. He confidently predicts that this will ensure “nearly $400 million a
year in film/TV activity.”
Budget Director John Nixon told Michigan Capitol
Confidential that the governor’s proposed budget is not about opposing the
film industry. Instead, it’s about what makes sense, because the money that the
state gives to movie makers comes out of state coffers paid in by all
“I wouldn’t sit here and say we have to
kill (the film industry) or it’s a waste of time,” said Nixon. “We have to come
up with a mechanism that doesn’t hurt the state the more successful they (the
filmmakers) are. Whatever the number is, it’s coming at the expense of
Center has long been critical of these types of programs,
based on two exhaustive studies. (The most recent study
was completed in 2009.) The Center’s conclusions were reinforced by a state audit
conducted in 2010, a recent Senate Fiscal Agency analysis,
and a study from the Upjohn Institute.
Even if the state hired actors Kurt Russell, William Baldwin
and Robert De Niro to replace laid-off firefighters,
the empirical evidence suggests it is unlikely that the money spent on such a
niche industry will ever pay off.
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