A pair of controversial, costly, and widely criticized bills are on deck for the Michigan House Tuesday — passing billions in costs to taxpayers to finance Hollywood films.
So-called “film-credits” have wormed their way into Michigan Democrats’ lame-duck legislative session through a pair of bills, sponsored by Rep. John Roth, R-Traverse City, and Rep. Jason Hoskins, D-Southfield.
The legislation could give more than $2 billion in subsidies to the film industry.
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House Bills 4907 and 4908, on the House’s agenda for Tuesday, amend Michigan legislation on economic development and the state’s Income Tax Act to resurrect tax credits to companies that produce film productions in Michigan. The credits would be administered by the Michigan Film and Digital Media Office.
While the credits come with qualifications, the room for excess is broad: FDMO could dole out up to $25 million in tax credits for a commercial photography project under 20 minutes long in its first three years and up to $75 million before the legislative sunset of the credits.
A longer production could cough up to $200 million in revenues in the final four years.
The legislation also puts additional discretion in the hands of the FDMO. The bills limit a credit for a single entity to 20% of the annual cap specified, “unless,” the bills say, “the MFDMO decides that a greater amount would be in the best economic interest of the state.”
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In other words, the Michigan Film and Digital Media Office, under the auspices of Gretchen Whitmer’s Michigan Economic Development Corporation, could give filmmakers a bigger tailwind on taxpayers’ behalf.
So far, legislators have given businesses over $4 billion in subsidies this session. Also on tap Tuesday is Hoskins’ HB 5768, an expansion of Michigan’s Strategic Outreach and Attraction Reserve program, which, critics say, gives legislators unprecedented leeway to reward friends with major state economic subsidies.
According to the Mackinac Center for Public Policy, “the SOAR program allows politicians to give as much money as they want to any company they choose, with the only limits being what has been authorized and further appropriations committee approval. No other state operates a program like this.”
The MCPP in Michigan has been an outspoken critic of the credits. The state’s last round of film credits saw Transformers and Batman franchise pics filmed in the state. In what has been characterized as “ruin porn,” the action flicks sought out blighted and distressed areas as crumbling backdrops to cinematic carnage.
Meanwhile, film credits, it is widely understood, don’t work. The Mercatus Center at George Mason University determined that film credits, which are offered in dozens of states, don’t offer the promised benefit to economic activity.
New York’s similar film credit drew about $0.15 in state tax revenue for every dollar in tax credits to the film industry.
North Carolina’s expensive credits netted only a few dozen jobs, while the programs in other states were criticized for exploiting taxpayers to line film producers’ pockets. Another study found “the best jobs go to outsiders.”