News Story

Fuzzy Film Math

A May 7 article by Katherine Yung of the Detroit Free Press on the Michigan Film Office stated that its tax-credit program to attract Hollywood created more than 3,000 temporary jobs.

The article read:  "The state's 42% movie tax credits have created more than 3,000 temporary jobs, helping people save their homes and cars."

Michael LaFaive, director of the Mackinac Center's Morey Fiscal Policy Initiative, said that may not be true and isn't supported by a study promoted by the Michigan Film Office.

According to a Michigan State University study of the film incentive program, there were the equivalent of 1,102 year-round jobs created by the film productions in 2008.

But LaFaive argues that the film incentives may not have "created" many jobs because the study didn't take into effect the amount of subsidy given to filmmakers - $48 million.

That $48 million was taken from Michigan businesses in taxes and then given to Hollywood filmmakers to help finance those "created jobs."

"There is an opportunity cost to this claim (of 3,000 jobs)," LaFaive said.

Other businesses could have possibly created as many if not more jobs if they didn't have $48 million sapped from their coffers in 2008 or another $68.7 million in 2009, LaFaive said.

"The Film Office should not assume that they would have created more jobs than if the state had left the private sector alone," LaFaive said.

LaFaive thinks the Detroit Free Press's figure of "3,000 temporary jobs" may have come from the Michigan Film Office's 2009 Annual Report. This summary states that there were 3,867 jobs "created" that year.

But did that include the $68.7 million given to Hollywood film companies in 2009?

Janet Lockwood, commissioner of the Michigan Film Office and the subject of the Detroit Free Press article, didn't reply to an e-mail requesting comment.