Michigan’s Film Incentives, Do They Work?

November 15, 2010 -

An issue paper published by Michigan’s Senate Fiscal Agency examined the state’s film incentive program and stated that the economic enticements “represent lost revenue and do not generate sufficient private sector activity to offset their costs completely.”

Authored by economist David Zin, the paper (PDF) imparts a belief that tax breaks (which also apply to videogame makers) have “generally exhibited” a positive impact on the private sector, at least in terms of creating jobs and generating income, he added, “Any probable impact from the film incentives is likely to have a negligible impact on economic activity in Michigan, particularly when the economy is viewed as a whole.”

Zin’s analysis prompted Jim Burnstein, Vice Chairman of the Michigan Film Office Advisory Council and head of the screenwriting program at University of Michigan, to write an impassioned defense of the incentives.

Burnstein discussed how his students at UM typically depart for New York or Los Angeles upon graduating, as “Virtually none of them were inspired by my example that you could live and work here (Michigan).”

Among those Burnstein listed as fleeing the Wolverine State is Activision Blizzard CEO Bobby Kotick, himself a graduate of the Ann Arbor-based school in the 1980s.

Burnstein wrote:

We educated all of these individuals in Michigan and lost them. How many jobs did they create, and how many tax dollars went with them? We simply cannot afford to export our creative class any longer.

The tax incentive defender went on to praise the ripple effect of such legislation, noting that businesses like “dry cleaners, florists, gas stations, hardware stores, trash haulers, even porta-potty providers who are not just surviving, but thriving, thanks to our incentives. “

Burnstein said that backers of Michigan film incentives took “more of a Ronald Reagan approach” to the legislation, adding that the purpose was “to make the people, not the government, rich.”

Michigan’s film incentives were enacted in 2008. Burnstein notes that in 2007, Michigan had three films shot in its territory at a cost of $2 million total. The last nine months of 2008 saw 38 projects spending $125 million, while in 2009, 43 projects shot in Michigan, spending $223.6 million.


 
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