James Hohman testifying on film incentives.
In 2009, Michigan legislators voted on a near-unanimous basis (one Republican dissented) to start offering film producers tax money if they would shoot their movies in Michigan. The program was costly — annual subsidies exceeded $100 million a year. Thankfully, legislators are reconsidering this program and on March 11, the Michigan House voted to end the state’s film incentives on a 58-51 vote.
Film incentives are ineffective. The case against them has been around at least since 1850 when Frederic Bastiat wrote about what is seen and what is not seen. If you break a homeowner’s windows, you would see all the economic activity from having to replace them. This is great for the glazier, but bad for the homeowner and bad for prosperity.
Taking money from Michigan taxpayers to give to movie producers is the same idea. Taxpayers might not have a broken window that they have to repair, but they are still paying for film production.
I was given the opportunity to present on this issue and shared this insight as well as some of our other findings.
Despite the $500 million that taxpayers have devoted to this program, the state has slightly fewer film jobs than when it began. The Wall Street Journal took note of that research and included it in a recent editorial opining against these programs.
After my testimony, a number of people on the receiving end of the spending testified — in-state producers, film crew members for the Batman vs. Superman movie and others.
It seemed like the committee chairman Jeff Farrington (R—Utica) was sympathetic to the point. After one of the beneficiaries shared his story, Farrington remarked, “Everyone loves free money.”
As the House vote indicated, the money is not free — it comes out of taxpayer pockets. It’s good to see that there is serious attention given to ending the program.