If Rick Snyder is elected governor, we can say good-bye to the movie and television business.
He has called the film incentives “dumb” and “a gimmick.” He claims they don’t pay off and calls for phasing them out – this during a campaign when candidates are usually evasive.
So it’s pretty obvious: If Snyder wins, they’re gone. This would be bad for Michigan – and, I fear, based on some misconceptions.
I was involved in bringing these tax incentives to our state. I helped with their creation, testified before the Legislature, met numerous times with the governor and her staff, and shared – with other Michigan-connected artists – our frustrating experiences in convincing studios to make films or TV shows here and employ Michiganders, only to be told the work was going elsewhere – to states with incentives.
Back then, we advised that the only way to win this business was to jump to the front. For films and TV shows – mobile operations that can set up fast – cost is everything. If you offer 40% and someone else offers 35%, all things being close-to-equal, they’re coming to you.
The idea worked. Within three years, we jumped from less than $2 million in film and TV activity to more than $600 million to date. Name me another business that grows that fast. Especially in Michigan. A battle of the studies
Critics of the program – usually people who will never benefit from it – say we’re not making back enough money. They point to studies that claim a meager return of tax revenue for the dollars put out.
Well, first of all, the idea was never to refill the state’s tax coffers. Not at the start. The idea was to create jobs. To launch an industry. To spur building and infrastructure. And to keep young minds and creative talent from fleeing the state.
It has done all of that.
As to the cost? Critics wave studies claiming the money laid out only returns nickels on the dollar. Supporters say for every dollar put in, more than a dollar comes back. How can there be such disparity?
It happens in every state with incentives – New Mexico, Louisiana, Connecticut, etc. Critics do studies. Supporters do studies. But it is terribly hard to measure the ripple effect of a movie or TV show – the hotels, rental cars, restaurants or tangential businesses. Jobs that last eight weeks get labeled “temporary,” yet people can make enough in those eight weeks to last a year. So is it temporary or full-time pay? It is also near impossible to measure whether someone who was about to flee Michigan stays and pays taxes thanks to the incentives. What check box does that go into?
So it’s confusing. But this should be clear. First, we give tax incentives to all kinds of businesses (more than $3.5 billion to more than 500 companies under Gov. Jennifer Granholm, according AnnArbor.com). And second, isn’t that partly what our tax money is for? To create jobs, ignite citizens and boost the image of our state? The best we have right now
We always said, at the beginning, you must give these incentives five years’ minimum. Let studios be built. Production houses, too. Let our crew base grow. The more we have talented editors, art designers, directors, etc. the more they will be hired from here and not brought in (because you get a bigger tax break for using Michigan people). And the more infrastructure, the more permanent jobs. Someone has to clean those places, answer phones, keep the books.
And we haven’t even mentioned digital gaming – a business much larger than movies and TV combined – which is also part of the incentives. We’ve barely scratched that surface.
After five years, you re-evaluate. Maybe then you’ve hooked enough business to adjust the rates.
But the worst thing you can do with incentives is what Snyder is doing: talk about killing them. Hollywood is a small world, and no one wants to plan a film – which can be a yearlong operation – in a shaky environment. Snyder’s possible election already has future productions reconsidering.
So forget “phasing” these incentives out. The minute Snyder announces that, he might as well kill them outright. No one will build. No one will invest. And OK, if that’s what our citizens want, fine. But then what?
Do you think the state will be better off? Do you really envision some new better use of the money by our government? Like what? As I often want to say to these angry critics, so what’s your great idea? What new industry that is growing, is tech-savvy and excites young people do you plan on bringing here? And how will you attract it to a Rust Belt, population-dwindling, economically choking state?
And don’t say “incentives.”
Contact MITCH ALBOM: 313-223-4581 or malbom@freepress.com. Catch “The Mitch Albom Show” 5-7 p.m. weekdays on WJR-AM (760).
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