"Michigan Gov. to Film Business: 'Drop Dead.'

[SWMAP]

Today's headline in Hollywood's Variety:
http://www.variety.com/article/VR111...query=Michigan

[1KielsonDrive]

Correction: Michigan Governor to everyone......Drop dead!

[Pam]

Cutting a program that was actually having a positive impact? Wow, he sure has business know how.

[rjk]

What I don't undrstand is that if this is so great for Michigan why hasn't some other state gone above Michigan's 42% production-cost tax kickback?

[Richard]

What I don't undrstand is that if this is so great for Michigan why hasn't some other state gone above Michigan's 42% production-cost tax kickback?

They will ,somebody before as a push or incentive to bring the film industry into MI put the bid at 42% so now the next state will say okay we will give you 42.5 % when you are dealing will multi millions that is a chunk of change.

What was so wrong with a 53% return on the taxpayers dollar?

[Danny]

Synder will be the a one term NERD! He can't slash the film incentive program from its budget. Try cutting the pay from all republicans and other politicians. That will save some money. Legislatures, don't approve that budget! Or Hollywood would find another state and another city to make their movies.

WORD FROM THE STREET PROPHET

Don't vote for Snyder in the 2013 election.

The show must go on for Neda's sake.

[stasu1213]

Who is Neda?

[rjk]

They will ,somebody before as a push or incentive to bring the film industry into MI put the bid at 42% so now the next state will say okay we will give you 42.5 % when you are dealing will multi millions that is a chunk of change.

When will they? This April it will be three years since this tax incentive plan started and I don't see any other state approaching our 42%. If imitation is the sincerest form of flattery I don't see any other state following our lead. When you have a great idea people follow it, they don't sit back and do nothing. With our 42% are we just the smartest people in the room and all the other states don't get it?

[DetroitDad]

When will they? This April it will be three years since this tax incentive plan started and I don't see any other state approaching our 42%. If imitation is the sincerest form of flattery I don't see any other state following our lead. When you have a great idea people follow it, they don't sit back and do nothing. With our 42% are we just the smartest people in the room and all the other states don't get it?

Sometimes, one man's garbage is another man's treasure.

[Fnemecek]

When will they? This April it will be three years since this tax incentive plan started and I don't see any other state approaching our 42%. If imitation is the sincerest form of flattery I don't see any other state following our lead. When you have a great idea people follow it, they don't sit back and do nothing. With our 42% are we just the smartest people in the room and all the other states don't get it?

The biggest reason for why no one has one-upped Michigan on the tax credit game, in my estimation, is the fact that there's been talk of repealing the tax credits since the day they were enacted. None of the other states seem inclined to change their offer since it constantly seems like our program is going away. Instead, they are changing their programs so that they're in a competitive situation regardless of whether or not Michigan stays the course.

For example, under the Michigan program, film studios have spend all of their money and then wait several months to a year before they get their check. Other states are offering a smaller amount of money, but delivering it much faster than Michigan.

New Mexico and several other states, for example, will get filmmakers their rebate within 90 days. Georgia and a couple of others have set up programs so that they can get their money before they even start filming.

[BagAJellyDonuts]

What I don't understand is that if this is so great for Michigan why hasn't some other state gone above Michigan's 42% production-cost tax kickback?

When I play cards there is saying that goes like this: "To win, you've got to take chances".

We call those people losers. But at least they look good losing.

[LeannaM]

What I don't undrstand is that if this is so great for Michigan why hasn't some other state gone above Michigan's 42% production-cost tax kickback?

Missouri's is 35% and it [[from what I have read) was a great return on the investment.

Unfortunately the governor is threatening both the film credits and the historic preservation tax credits. Both seem pretty worthwhile, but I guess in a recession that doesn't matter. That said, that doesn't mean that every tax incentive program is worthwhile. I guess you have to look at each individually.

If it brings more revenue than it costs then it should be worth it.

[gdogslim]

What I don't undrstand is that if this is so great for Michigan why hasn't some other state gone above Michigan's 42% production-cost tax kickback?

Excellent question. Answer: Because other states know it is a financially losing proposition.
Another question to ask is, Why did the tax subsidized cash for clunkers end if it was so successful, and it was run so well and was so smooth wasn't it?? Answer: It wasn't, transfer of wealth.

My question is, Why are all the people who complain about the rich and their taxes are not complaining about Michigan taxpayers giving an actor who may make say $1,000,000 $420,000 in tax money. Or the rich studios or the rich producers all of this tax money who go back to LA or NY with it. Where are all the left howling about corporate subsidies now ??
Obviously there is some money going to be spread around and help a lot of people out but studies show that there is a return of only .15 cents for every dollar spent.
http://sdamico.com/subsidizing-holly...ging-taxpayers
http://spectator.org/archives/2011/0...sidizing-movie

Mitch Albom is bellowing about this because he is part of this game and stands to benefit.
We are cannibalizing each other with tax money, like trying to impress the woman with the best boob job that we have the most money and will blow it all on her like a drunken sailor.
With 43 states competing for subsidies it is a no win situation trying to out bribe the hollywood fat cats.

Now Jenny is out in California with her pension money. Isn't that special.

[Fnemecek]

Excellent question. Answer: Because other states know it is a financially losing proposition.

No, the tax credits represent a net gain in tax revenue; not a net loss. As I mentioned above, the other states have been reluctant to leap ahead with a larger incentive simply because of the persistent talks about about repealing the credit out of Michigan.

Instead, they've altered their credits to get their [[smaller) incentive to filmmakers faster than Michigan does. This way, they're in a stronger position regardless of whether or not Michigan keeps its incentive in place.

Mitch Albom is bellowing about this because he is part of this game and stands to benefit.

#1. Mitch Albom is a writer. His salary doesn't qualify for the incentive in Michigan or any other state. He will continue to make the same amount of money, regardless of whether or not the film credit stays in place.

#2. Writers can set up shop any place there's an internet connection. It doesn't matter if the local economy sucks or is doing great. Again, Mitch Albom will continue to make the same amount of money, regardless of whether or not the film credit stays in place.

We are cannibalizing each other with tax money, like trying to impress the woman with the best boob job that we have the most money and will blow it all on her like a drunken sailor.
With 43 states competing for subsidies it is a no win situation trying to out bribe the hollywood fat cats.

If it's a net gain in tax revenue, and generates a few thousand local jobs, then it's not a "no win situation". Unless, of course, you don't think jobs and tax revenue are a win for Michigan.

[Johnnny5]

Good riddance! Unfortunately, most of the remainder of Snyder's proposals are bunk!

[Richard]

Good riddance! Unfortunately, most of the remainder of Snyder's proposals are bunk!

Jonhnnny5 Can you explain why you feel that it is a good riddance ?

I am not calling you out but none of this is cut in stone as of yet and discussions like this need to happen so the taxpayer who is going to be affected can get a clear picture on how this impacts them.

He [[Gov)has thrown out there for public view, the items that the public stands up for will or should stay,but if the public does not know what it all means, it is hardly in the publics best interest or helping them to make an informed decision.

[Johnnny5]

Jonhnnny5 Can you explain why you feel that it is a good riddance ?

I am not calling you out but none of this is cut in stone as of yet and discussions like this need to happen so the taxpayer who is going to be affected can get a clear picture on how this impacts them.

He [[Gov)has thrown out there for public view, the items that the public stands up for will or should stay,but if the public does not know what it all means, it is hardly in the publics best interest or helping them to make an informed decision.

In my opinion the film industry is just a fair weather friend [[Or is golddigger a better term?). The ONLY reason they are here is because the state is massively subsidizing their projects, and the fact that the ending of those subsidies means the loss of the industry is proof of that.
I'll temper my argument by saying that I'm not in favor of any tax credits or public funding for any for profit industries, but to subsidize an industry that is completely mobile is a complete waste of our tax dollars.

The climate in Michigan would mean that any jobs in the industry would be at best a seasonal activity with limited production during inclement weather [[There's a reason the industry thrives in sunny California). Also with most large tax subsidies/credits there's usually a long term agreement for instate jobs, or long term capital improvement. With these credits there is none! It's cash your check and take nearly half back to California, and that's exactly what has been happening.

I know someone is going to counter with the "Film studios, film schools" argument, but of all those proposed developments that were floating around I have yet to hear of any successes. The Allen Park school ended up being a near total failure [[If not fraudulent) and the rest are either stalled, cash grabs, imaginary or simply political hot air.

Of course none of this matters. Many people think the program is a complete success because they get to see George Clooney!

[lilpup]

The ONLY reason they are here is because the state is massively subsidizing their projects, and the fact that the ending of those subsidies means the loss of the industry is proof of that.
I'll temper my argument by saying that I'm not in favor of any tax credits or public funding for any for profit industries, but to subsidize an industry that is completely mobile is a complete waste of our tax dollars.

The climate in Michigan would mean that any jobs in the industry would be at best a seasonal activity with limited production during inclement weather [[There's a reason the industry thrives in sunny California). Also with most large tax subsidies/credits there's usually a long term agreement for instate jobs, or long term capitol improvement. With these credits there is none! It's cash your check and take nearly half back to California, and that's exactly what has been happening.

And what's wrong with that if it benefits both the film industry AND Michigan taxpayers? If you don't get people in jobs you're still going to be paying for them through state aid programs! At least the film industry is bringing private money to spend in the state.

[Goose]

Of course none of this matters. Many people think the program is a complete success because they get to see George Clooney!

it's also a very "liberal" industry, thus the popularity here.......

[Fnemecek]

In my opinion the film industry is just a fair weather friend [[Or is golddigger a better term?). The ONLY reason they are here is because the state is massively subsidizing their projects, and the fact that the ending of those subsidies means the loss of the industry is proof of that.

You say "fair weather friend." I say it's just business. They came for the tax credits. They'll leave if they dry up. It's not personal, it's just business.

I'll temper my argument by saying that I'm not in favor of any tax credits or public funding for any for profit industries, but to subsidize an industry that is completely mobile is a complete waste of our tax dollars.

I'm more pragmatic than you. If it produces a net gain in tax revenue, I'm all in favor of it.

The film incentives do produce a net gain in tax revenue, if one includes the increased tourism spending and secondary spending as a result of it. Therefore, I support it.

MSU did a study on the economic impact of the film industry in Michigan. They concluded that every dollar spent on film production ultimately resulted in five dollars being spent, with each level of spending resulting both income and sales tax revenue for the State of Michigan.

http://media.igorfilms.com/msu.econo...pact.study.pdf

There's also the fact that movies have a proven impact of driving tourism. This is important in a state like Michigan where tourism is our third largest industry.

http://www.sciencedirect.com/science...b&searchtype=a

The film incentive produces a net gain in tax revenue as well as a few thousand jobs. Quite frankly, Michigan needs more jobs and more tax revenue; not less. Therefore, philosophical arguments aside, ending the film incentive is simply a bad idea.

[canuck]

There is a lot of competition in that market. All states and provinces that have a thriving film industry give tax breaks. This is not a good idea for Michigan, it hinders the effort some people have made to kickstart an industry that obviously was on its way to providing opportunities for lots of craftspeople.
There is a sense that it is being treated as a frivolous business, but I think it also is a mistake because would be Michigan film entrepreneurs could develop alongside the majors' studio input.
I hope for Detroit that this doesnt happen.

[jtf1972]

I want to see what the effects of this budget will be long-term. All the incentives were just band aids to cover up an extremely flawed system. Don't think it was flawed? Look around.

[Richard]

I want to see what the effects of this budget will be long-term. All the incentives were just band aids to cover up an extremely flawed system. Don't think it was flawed? Look around.

Yes and no the question is how far should a city or state go when offering incentives ,which are used to promote growth jobs and building restoration,some have short term impacts and others have long term. You still need to look at the future.

Take a step back 5 years,how many buildings in Detroit were vacant? Now 5 years later how many have been rehabilitated ? Detroit city center and Woodward ave is moving forward as a direct result of incentives,it was expensive to the tax payer short term,but look at the difference 5 years later. Is it noticeable? and as a taxpayer do you think it was worth it?

Flawed yes extremely, in some cases abused,in his proposal he is also setting aside funds to still provide some help but and unless I am reading it all wrong ,correct me if I am wrong,but there seems to be a wanted shift of decision making when it comes to the distribution of incentives to come from Lansing only.One would hope not ,but like I said I may be reading into something that is not there.I do hope that is the case.

[surenowinlife]

This will certainly hurt all the shops that provide props, not to mention all the peeps who work in the industry.

[Richard]

Excellent Jonnny5 Thank you

So we have say for instance 3 broad categories of where incentive dollars are spent

1: lets call that a Transit incentive which would be an incentive to entice a outside venture to come into MI ,They would be considered a high term taxpayer investment for a short term gain,if you take the how well has that worked up to this point approach. Then the state needs to provide the real numbers to the general public or include them in news releases.

2: The incentives that are used directly towards the rebuilding aspect,think about the large projects recently under way or have been done with historical properties downtown,those are already structured on a the numbers have to match basis,they are long term payoffs,and the jobs they provide really do not affect the city as a whole,but what they do provide is an important message of a city moving forward which intern attracts other investments. And helps to preserve a cities history that defined them in the first place.

3: Incentives used to lure business into the city to provide jobs,this is already structured according to how many jobs are you providing and at what pay-scale.So a company that wishes to provide good paying manufacturing jobs will be looked at more so then a fast food chain who would provide more jobs but at a less pay.

You are providing a incentive for a business to locate there so the numbers or rate of return back to the taxpayer should match.It is not about why should we help a for profit company in business because if you say that then there are many other cities and states in this country that would be glad to have them,that is the way it is so that is not a factor at all.

The [[Gov) has proposed a $25,000,000 cap on these incentives and saying that it is no longer an incentive it is a direct grant ,so heres your bank when it is empty thats it,short term savings long term loss . So what happens to the company that comes in August when that fund is dry.

As a grant ie one time payment what happens if two years down the road the company moves south that money is gone,incentives are structured over time. But because the Gov was a past venture capital fund owner/manger maybe he is on to something . There needs to be some more clarity as to what is going on.