Film Industry Quick To Take Up State Incentives

June 9, 2008
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Gov. Jennifer Granholm in her January State of the State speech reiterated goals to attract the creative class to Michigan. She focused on tax incentives in several industries including homeland security, life sciences and the film industry. The latter is now receiving considerable criticism, especially from the Michigan Chamber of Commerce.

The story on page 6 reports that Granholm has no plan to limit the amount of tax incentives for the film industry, which may be a point to argue. But there is no argument in the rather immediate reaction from film companies — including that of Clint Eastwood — which are delivering on the promises of incentives.

Since April, when the legislation was approved by both houses of the Michigan Legislature, the state has received 22 signed and approved agreements with such businesses. No other industry has reacted — or has been able to react — so nimbly react to the red carpet lure of incentives.

The Michigan Chamber argues that such policy will result in “Michigan tax dollars being used to subsidize out-of-state movie companies which are unlikely to make a permanent location commitment to Michigan.”

To the contrary, such incentives have created such business clusters on the East Coast and in the Carolinas, where production companies ended up staying after the expense of setting up shop. Michigan’s open door is not as liberal as some other states. Further, it is fairly common knowledge that union costs associated with the film industry, particularly in California, have served to drive that industry to look elsewhere. The Business Journal receives mail daily from film industry leaders across the country, usually emphasizing the “community” created as a result of film and production houses in those cities.

West Michigan legislators, from Sen. Bill Hardiman, R-Grand Rapids, to Rep. Bill Huizenga, R-Zeeland, have crowed about the legislation and anxiously participated in its approval.

If there is another thing to be said, it is in criticism of the limitations on the businesses that produce commercials. The advertising agencies in this state, and especially in West Michigan, could certainly use the incentives to build against the powerhouses on both coasts. Several companies in West Michigan would benefit, including Amway, Quixtar and the Big Three furniture industry, all doing such business elsewhere and trapped by the surcharges of big union dues.

The Michigan Chamber, which initially approved of the new Michigan Business Tax, is now using that as a hammer in declaring the film incentives as unfair. The MBT is heinous and deserves a stage uncluttered of other issues; the focus must be on reform of this vile impediment to most all Michigan businesses.

Local measures of film industry impact are noted through such events as Festival of the Arts, but most especially at the fifth largest film festival in the U.S., Saugatuck’s Waterfront Film Festival June 12 to 15. Take off the tie and wander through in “casual day” dress.

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