Mackinac Expert Talks Film Incentives on NPR

No full-time jobs were created as a result of this corporate welfare

Michigan once had the most generous film incentive program in the nation, but economic realities caused legislators to trim back these subsidies. Recently, the state House voted to end the $50 million program altogether.

Policy Analyst Jarrett Skorup was on NPR’s “All Things Considered” to discuss state film incentives. He said work from independent economists show that this is one of the worst things state governments can spend taxpayer money on.

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“In Michigan, a lot of the money goes to out-of-state producers who come in, film and then leave and then, of course, can go somewhere else the next time they make a film,” Skorup said.

He added, “The Michigan Film Office actually found last - in their latest report that there were no total full-time jobs created from the program.”

Stateline, a project of Pew Charitable Trusts, also recently covered the issue. The publication noted the cut backs to Michigan’s incentive program as well as other states. Some states, such as California and New York, are meanwhile boosting their subsidies.

The report quoted Robert Tannenwald, a retired Federal Reserve Bank economist, who has authored a study on state film incentives for the Center on Budget and Policy Priorities, a liberal think tank in Washington, D.C.:

“Film tax credits don’t pay for themselves, so states have to raise taxes or cut expenditures (to make up the difference),” Tannenwald said. “Those snuff out jobs as fast as film tax credits create them.”

Tannenwald said the competition among states puts them into “perpetual competitive purgatory. If one state backs out, and the other states keep doing it, the state loses an awful lot of film production.”

He said the benefits of the production are quickly visible – working carpenters and electricians and politicians getting calls from the locals saying it’s fun to watch those films take place. The costs are less visible—and spread out over time.

“People get excited about seeing movie stars in local cafes and walking down the street. You can’t do an anecdotal interview with a commuter who is sitting on a train platform with frozen hands because of the lack of money to upgrade public transportation,” Tannenwald said.

Michigan is still handing out credits to filmmakers while the bill to end the program sits in the state Senate.

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