Michigan Film Incentives

[Pam]

Film incentives are under attack again. Didn't we have some members here who were working on films? Freep article:

http://www.freep.com/story/news/poli...ouse/24360757/

Online petition:

http://www.gopetition.com/petitions/...bill-4122.html

I emailed my reps in Lansing.

[JBMcB]

And I emailed my reps to stick a fork in 'em. Time to end handouts to to huge companies. We'll start with an industry that will never put roots down here.

[ABetterDetroit]

And I emailed my reps to stick a fork in 'em. Time to end handouts to to huge companies. We'll start with an industry that will never put roots down here.

I had the pleasure to be invited onto a feature film set here in Detroit. After spending half the day with all the nice people from California I started actively searching for Michiganders involved in the film. The only ones I found where taking care of the perimeter security with radios, the extras, and the food caterers. It truly is a business run out of the back of truck[[s) that roll wherever the tax subsides are. Michigan cannot afford to help pay the paychecks for people who live in CA so they can pay their mortgages back there no matter how much fun it is to have them here to shoot movies for a few months.

[Pam]

Did you even read the article? They gave examples of local people working on films.

[ABetterDetroit]

Did you even read the article? They gave examples of local people working on films.

Yes I did. The above post is what really happen to me in my one day in the Michigan feature film business. I am not making it up. 90% of the folks on the set where Californians with spouses, children and houses back in California.

I am not against incentives, I just would rather see them used to start businesses that will stay and have a chance to survive without them here in Michigan in the future. If they have to be used countinously or the business will bolt for the next best deal then that's a bad bet to me.

[Thruster315]

I had the pleasure to be invited onto a feature film set here in Detroit. After spending half the day with all the nice people from California I started actively searching for Michiganders involved in the film. The only ones I found where taking care of the perimeter security with radios, the extras, and the food caterers. It truly is a business run out of the back of truck[[s) that roll wherever the tax subsides are. Michigan cannot afford to help pay the paychecks for people who live in CA so they can pay their mortgages back there no matter how much fun it is to have them here to shoot movies for a few months.

You say you were invited onto the set, but did you work on the set?

I think there needs to be some clarification there to set the record straight. Because I've worked on those sets and have been the beneficiary of some of those film incentives- and I live and work in Michigan. If these incentives fgo elsewhere, I might have to follow suit. Now I didn't have my own trailer nor did I have assistants fluffing my every need. I'm just one of the many people that comprise the crew that help make the movie; some were from California, Ohio, Louisiana and all over as well as many Michigan residents. It wasn't always glamorous work but it was good honest work nevertheless.

The money I made on those jobs I turned around and spent here. Those Californians, for the time that they were here also rented Michigan homes, spent money here with Michigan companies, and employed Michiganders.

Yes, we worked out of the back of trucks, trailers and cars- but welcome to TV/ movie production work. If the film incentive critics all expected us to have 40 hour weeks and full time jobs with pensions- they really don't understand the business then. Yes, we're all vagabonds for all intents and purposes. We move from one production to another- constantly. We have no concrete set in stone idea where our next job is BUT we hustle our asses off and are constantly employed; partially because of this film incentive and our own determination. It's still a thriving industry and I for one would like to see Michigan be a player in a thriving industry for once.

I don't want to leave the state to find work but will if I have to.

[Wesley Mouch]

...I don't want to leave the state to find work but will if I have to.

This comment explains that film credits granted by the taxpayers to certain companies don't create permanent jobs.

So you made some money. That's great. But the film companies, like you, are not permanent jobs. They are temporary jobs.

During the recession, I'd agree that borrowing and spending is a valid economic strategy. See NYT/Krugman.

However Michigan cannot print money, so every dollar you received and the film companies received was collected from Michigan taxpayers. Some, maybe most of it stayed local. But some, say 20%, was taken back to other states.

It is difficult to imagine that its better to give away 20% of our money to others, rather than simply fund unemployment benefits, or say, fund Detroit worker pensions, or retain DIA artwork.

The idea was that the film industry would find Michigan an appealing place to do business, and they'd set down roots. That they'd enjoy reduced labor costs compared to California and other states. And they'd stay put. Then, and only then, would new dollars flow to Michigan.

What's happened, is a race by dozens of states to attract film work. It feels good because the work shows up quickly. Building an auto plant with automation takes much longer, and frankly is much more expensive. But those kinds of physical capital investment is what would really pay back.

If you wish to work in film, then G-d bless you. Enjoy life following the credits around the country, just like some construction and architecture firms spent the last 20 years chasing municipally funded stadium construction as it separated taxpayers from their earnings.

Remember first and always that on the state level, every dollar spent is a dollar removed from another local taxpayer's pocket. And every dollar removed from a corporate pocket is one dollar that they cannot spend on wages, and one dollar that will encourage them to move to Alabama to retain for their shareholders and working-class pensioners who rely on their 401k investment income.

[ABetterDetroit]

You say you were invited onto the set, but did you work on the set?

I think there needs to be some clarification there to set the record straight. Because I've worked on those sets and have been the beneficiary of some of those film incentives- and I live and work in Michigan. If these incentives fgo elsewhere, I might have to follow suit. Now I didn't have my own trailer nor did I have assistants fluffing my every need. I'm just one of the many people that comprise the crew that help make the movie; some were from California, Ohio, Louisiana and all over as well as many Michigan residents. It wasn't always glamorous work but it was good honest work nevertheless.

I was a invited guest. I am not saying you or the Californians do not work hard and never did. In fact I like most people I meet from CA and I met many of them that day. Like I said before nice people filled with a lot less hate and prejudice than most Michiganders on average.

You just made my point with your work partners being from "California, Ohio, Louisiana, and all over" If we are going to use Michigan tax payer money to subsidize a business I believe that ALL of the employes should live in Michigan year round. Even if we had just spent the 425 million on law enforcement or teachers we would be better off because ALL of the money would go into the Michigan economy.

The "I would have to leave" threat holds no water to me. If you have your heart set on serving on a aircraft carrier we cannot buy one for you to work on right here in Michigan. Many carreers have better opportunities in other places and that is just a fact that cannot be solved with our tax dollars.

[Hypestyles]

what industries are actually "staying" in Michigan at all? Certainly not big manufacturing.

[Cincinnati_Kid]

They had to cut something, unfortunately it was the Hollywood incentive. They need to find a way to come up with funding to repair these horrible roads we have, which are some of the worst in the country, as the sales tax increase probably won't see the light of day. Between that, the high car insurance rates and more tax increases, Michigan is on the fast track of mediocrity. The people of this state, can only take so much. It's getting too expensive to live here anymore.

[Pam]

They had to cut something, unfortunately it was the Hollywood incentive. They need to find a way to come up with funding to repair these horrible roads we have, which are some of the worst in the country, as the sales tax increase probably won't see the light of day. Between that, the high car insurance rates and more tax increases, Michigan is on the fast track of mediocrity. The people of this state, can only take so much. It's getting too expensive to live here anymore.

It hasn't been cut yet. It's a proposal that hasn't been voted on by the full legislature. Quote from the Free Press link above:

The incentives cost the state about $425 million since they were introduced in Michigan in 2008. But they also generated $1.3 billion in spending by producers on everything from wages and salaries to services ranging from lumber yards, to sound and lighting technicians, carpenters and electricians to food and lodging, according to annual reports filed with the Michigan Film Office.

[Thruster315]

This comment explains that film credits granted by the taxpayers to certain companies don't create permanent jobs.

So you made some money. That's great. But the film companies, like you, are not permanent jobs. They are temporary jobs.

I think this is where you miss the boat about the industry. Those of us who are successful freelancers are employed easily 50 weeks out of the year. We are our own entities. We are our own CEOs, our own accountants, our own secretarial staff. We are in essence a company of one. You seem to think a "temporary job" is somehow less of a job than someone who has to work at an assigned 40+ hour work week with a company.

It is difficult to imagine that its better to give away 20% of our money to others, rather than simply fund unemployment benefits, or say, fund Detroit worker pensions, or retain DIA artwork.

What makes you think that we sole proprietors and freelancers don't fund our own pensions? The money we get from these jobs are funding my 401K just fine and we pay taxes here.

The idea was that the film industry would find Michigan an appealing place to do business, and they'd set down roots. That they'd enjoy reduced labor costs compared to California and other states. And they'd stay put. Then, and only then, would new dollars flow to Michigan.

This is where you and I agree.. sort of. The film industry hasn't been given a fair shake to even see what our state is capable of. That initial three year plan was never realized because when Snyder rolled into office he immediately cut the final year. You want these companies to come in here and invest? The government here needs to provide them with some form of stability to sink down roots.

If after some time, no one came to Michigan to even sink down as one root- then scrap it. They tinkered with it and made prospective investors skittish and that's not how productions get funded.

But the people that did believe were investors like Al Taubman, John Rakolta, Jr. and the William Morris Group. They sunk down money early on with the Raleigh Studio in Pontiac on the faith that the incentives were going to be around. And they got the shaft when the incentives were cut in the third year. Where was the Michigan government stability there?

What's happened, is a race by dozens of states to attract film work. It feels good because the work shows up quickly. Building an auto plant with automation takes much longer, and frankly is much more expensive. But those kinds of physical capital investment is what would really pay back.

Didn't the feds already do that with the government bail out of the General Motors already?

Remember first and always that on the state level, every dollar spent is a dollar removed from another local taxpayer's pocket. And every dollar removed from a corporate pocket is one dollar that they cannot spend on wages, and one dollar that will encourage them to move to Alabama to retain for their shareholders and working-class pensioners who rely on their 401k investment income.

Again, you think that the Michigan production community is not a working class group of people. My money is invested here and just because it's not the 40 hour work week with some mega-company doesn't mean it's any less viable or less valid. I think gone are the days of getting out of high school and landing those sort of corporate jobs. I see so many people not even hitting 50 and getting let go from their corporate jobs now. As an independent contractor, we're always taught to stay nimble, current and active in the field.

[ABetterDetroit]

Didn't the feds already do that with the government bail out of the General Motors already?

Let me make this perfectly clear. I don't want to see anyone lose their job and I welcome this discussion. In fact, it should be discussed more because our politicians, in my opinion, are incapable of tackling this issue without bias and therefore are completely useless on this issue and it is a critically important one. You have made some really good points to give me thought.

But please don't compare the state of Michigan with our rich uncle. When he sits down on the toilet, more money falls out of his pockets and rolls away forever than Michigan can take in in a year. The difference in numbers between Michigan's money and the largest financial entity IN THE WORLD by several times is staggering and it doesn't end just there. He borrows against himself at any time he wants for virtually any amount needed. He sets the rates! How good of a deal is that? "Hey buddy I'm in deep here and need a lot more so let's make the rate zero". Another fact about him is he can cut taxes and raise spending at the exact same time. There are no fair comparisons between a state government's funds and uncle Sam's funds. What he is capable of doing or does has no relevancy on what Michigan can do, we don't get to play with the same stacked deck he has.

[animatedmartian]

Didn't Allen Park spend some money on what would have been a production facility but as soon as Synder cut incentives it literally made Allen Park bankrupt a short time later?

At this point I'm pretty cynical about it and if Michigan isn't willing to invest in the film industry, then hey, more power to people who have got to leave Michigan to chase those opportunities.

I was in one or two episodes of one of the TV shows they filmed around here and I tried out it just to see what it was like, but I felt it was a pretty good career option if only a bit unstable. But that's perfect for someone like me whose a young, unmarried, college student. Michigan is pretty bad at funding higher education so if the burden is placed on me anyway, I might as well get the money back through movie and TV spots. But if the state chooses not to, well, hey there's 49 other states to choose from.

[Wesley Mouch]

...What makes you think that we sole proprietors and freelancers don't fund our own pensions? The money we get from these jobs are funding my 401K just fine and we pay taxes here....

If you pay your own pension with money funded by taxpayers, I think its a difference without a distinction.

I have nothing against film work. I made a few bucks. And I do personally know people in the industry. Fine and honorable work.

That doesn't film subdidies good public policy. Neither do the arguments that other industries, groups, and corporations are subsidized. Public subsidies rarely work. Just like tax credits. But they do feel good when you're on the receiving end.

[belleislerunner]

Quote "Didn't Allen Park spend some money on what would have been a production facility but as soon as Synder cut incentives it literally made Allen Park bankrupt a short time later? "

Allen Park went bankrupt because they didn't get an outside appraisal on the property and paid speculative prices. That's a CFO/city manager/council fail. Nothing to do with Lansing.

All film subsidies should end. The sooner we get off the "let's spend X million to be cool" the better financial footing we'll be in. Kudos for the House passing it yesterday. Now we just need the Senate to do the same.

[Pam]

For everyone who wants to end this and throw people out of work: can you tell me what other jobs programs does the state currently have that are having any effect? I haven't heard of any.

[bailey]

For everyone who wants to end this and throw people out of work: can you tell me what other jobs programs does the state currently have that are having any effect? I haven't heard of any.

The removal of incentives isn't throwing people out of work, the studios abandoning Michigan for other states' bribes to relocate are responsible for the loss of jobs. No state really wins that battle because, outside of California and New York it's a transient industry and they'll move to whatever state is the highest bidder.

My hope would be [[and it's an absolute pipe dream) the out state, teahadist republican dominated legislature directs whatever $$s this saves toward education or skilled jobs training... as per the dailies, Michigan woefully lacks an employable skilled populace. But they won't, because taxes are evil and government sucks and something about makers versus takers.... so really there is no point in bitching about really anything going on in Michigan economically because the voting population in this state is made up of a bunch of stupid fucks that keep electing these morons to run the place ..

[professorscott]

The difficulty with the statistic quoted earlier - that the state has spent over $400 million in film incentives but that this has "generated" something over a billion dollars in "spending" - is that it is an apples-to-oranges comparison framed to misleadingly appear to be an apples-to-apples comparison. To me, the political question is this: is that a good ratio? Remember, $1.3 billion in spending does not mean $1.3 billion back to the state's coffers; the state remains out most of the $400+ million. If we had spent that same $400+ million on fixing roads, or improving education, or improving public transportation, or on increased funding for the Pure Michigan campaign - or any combination of these and/or other things - would spending have increased by less, the same, or more?

It is possible to do this sort of analysis, but nobody bothers, because people tend to have a very strong emotional attachment to this film-incentive thing, whether they love it or hate it. Personally, I think 3-to-1 utterly sucks and there are lots of ways Michigan could have better spent the money. I'm not opposed to film incentives per se, I just don't think they're working well here; we're spending way too much money for what we're getting.

[jackie5275]

[QUOTE=professorscott;473326]The difficulty with the statistic quoted earlier - that the state has spent over $400 million in film incentives but that this has "generated" something over a billion dollars in "spending" - is that it is an apples-to-oranges comparison framed to misleadingly appear to be an apples-to-apples comparison. To me, the political question is this: is that a good ratio? Remember, $1.3 billion in spending does not mean $1.3 billion back to the state's coffers...../QUOTE]

I question what makes up the $1.3 billion in spending. Is it mostly wages for crews, security, catering, paying the venue, etc? Is it temp housing for the folks while they're here? I imagine it's some of all of that. Parts of the economy have more than likely benefitted are the housing & catering parts. Taxes may have been collected on the sales tax & lodging taxes for those parts. As far as income taxes on wages, how much of that is collectible to Michigan needs to be determined. Just on the surface, the $1.3 billion, spread out over the past 7 yrs since the start of the incentives, averages $18.5 million a year. Even if income tax was collected on that total, which is we know isn't all payroll, but for an example, let's say it was. That income tax would generate at best $6 million as a return. However, we know that number is flawed because it was not all spent on payroll. Additionally, as Thruster said, folks come from all over to work on the films. Not all states have tax reciprocity with Michigan, so Michigan won't even collect income tax on everyone working here. So since the film incentives began probably less then $5 million has come back to the State's coffers.

Yes, it's exciting when a movie is shooting downtown. Yes, it's exciting when you get a small, few second glimpse at Hugh Jackman, Mark Wahlberg, or Ben Affleck. But that excitement is short lived when you're driving down jaw jarring roads that won't get fixed due to lack of funds. Then you read how so much was given away to these folks with practically no return on investment from the State government side. From a business decision, it makes no sense.

[Wesley Mouch]

Simply giving $400 million to state residents below the poverty line would likely have a better ratio. In fact perhaps better than almost anything else. Less wealthy people buy food and necessities. They spend at local stores. They buy less high-value, imported products. I'd guess the local economy gets back 80% rather than 33%.