by Gongwer News Service
April 11, 2008

Two days after Governor Jennifer Granholm signed film-incentive legislation into law this week, the director of Michigan’s film commission was on her way to rub elbows with California movie pros and, reportedly, to fend off long lines of filmmakers who wouldn’t return her phone calls last year but now want a piece of the 40-percent tax break Michigan is offering.

Janet Lockwood said film commissioners from all the other states are calling her the rock star because so many producers want to talk to her.

In fact, leaders have reported, even before the governor put pen to paper, more than 80 television and movie makers had sent in scripts for consideration. Compare that to the just over 120 movies made in the state since 1946.

So far, it’s hard to ignore the signs of success of the package. In fact, it seems to be working just like its proponents said it would. It’s turning heads toward Michigan and has raised the incentives bar higher than any other state so far can match.

And the state’s already seeing the economic development ripple effect it was hoping for, with Ticktock Studios, a new production company in Michigan, announcing it will renovate a factory in Holland to act as its production center and begin work on a new film tentatively titled “Tug.”

Ms. Lockwood, the Film Commission director, has said that just one large film production could bring in $175,000 a day in revenue for the area where it’s shot — not to mention the influx of money from commercials, what some in the industry call the state’s “bread and butter.”

“We’ve got some real objective ways to show that this is working,” said Rep. Andy Meisner (D-Ferndale), the House’s lead sponsor of the film package.

The package creates a 40-percent credit for producing films or television productions in Michigan, with an additional 2 percent for producing films in “core” communities. In addition, the package allows for a 25-percent credit for film and digital media infrastructure investments, like building studios or purchasing equipment.

In addition, production companies will be eligible for worker-training tax credits. And the companies would be allowed free use of state property for film production.

Though it’s hard to argue against the power of incentives to attract filmmakers, many have expressed frustration that no one has released figures proving that the movie industry will be a boon to the state, instead of a financial burden.

In fact, even the Senate Fiscal Agency, which specializes in running numbers for legislators and telling them how their legislation will change the state’s bottom line, couldn’t estimate what the incentives would cost or how much they would benefit. There are too many variables, the analysis said, because no one can anticipate how many companies will take advantage of the credits, which credits they will use, how much each production will cost and how much each production will invest in the local economy.

While Mr. Meisner and the governor often point to other states as an example of the package’s potential for success (Louisiana had a $10-million film industry in 2001 before it enacted 25-percent credits, and a $600-million industry the year after), Mr. Meisner said he didn’t know how much of that additional revenue went toward paying for the additional incentives — in other words, what the net benefit of the incentives was to the state’s economy.

However, he said, he is committed to overseeing that the package does what he and others intended it to do, which is to diversify and revitalize the economy. He said he anticipates knowing the net benefit of the incentives by the end of the year.

“At that time, we can make decisions about what changes to make, if we need to,” Mr. Meisner.

To those who take issue with the state investing in the film industry at a time when others are out of a job or when some are seeing their business taxes skyrocket, Mr. Meisner said he credits every industry with its role in building the state’s economy and he is working to relieve their issues.

“But our economy is not as diverse as it needs to be and the [film industry] is a pretty dynamic industry,” he said, adding that he hopes the ripple effect will help other struggling sectors.

If nothing else, the package has had a positive effect on employment in the Film Commission’s office. Ms. Lockwood has three new staff members working and says she could use two more.

For nearly 50 years in Michigan, Gongwer News Service has provided independent, comprehensive, accurate and timely coverage of issues in and around Michigan’s government and political systems. For subscription information, including a free trial, visit Gongwer online.