Michigan Votes Forum

Introduced in the Senate on March 4, 2008, to authorize a refundable Michigan Business Tax credit of up to 42 percent of a film studio’s expenses for shooting a film or TV show in Michigan. The credits would be refundable, so if their value exceeded a studio's tax liability the state would send them a check

The vote was 34 in favor, 1 opposed and 3 not voting

(Senate Roll Call 142 at Senate Journal 27)

Click here to view bill details.

that cutting taxes for certain industrys is a good way to get them to do business here but cutting taxes to all business isn't a good way to get more jobs?

it to you but you would have to undergo a lobotomy so as to better fit into the dem/socialist party. The word "Democrat" originally meant "one who panders to the ignorant masses"

Wouldn't tax breaks help any industry? Why only target film production?

Just make a level-playing field and stop supporting one industry over another. You are only distorting the economy and adding confusion and complexity to an already incomprehensible tax system.

I have been following this tax credit for some time and I applaud it. If the movie industry has a reason to come to Michigan we will all benefit. Not only will we see the creation of jobs but also, a little publicity for our scenic state won't hurt.

"little publicity for our scenic state won't hurt." The only scenery they ever show here are thugs and burned out buildings. I doubt they need more of my money to do this. Cut all taxes and they will come

Facilitate and authorize tax breaks for Michigan film production - this is going to bring a plethora of jobs to Michiganians? Idiocy, idiocy, idiocy! How about some equity here and give tax cuts across the board to all busineses and industries? Especially those which would supply the jobs needed to put Michigan back to work? Sorry, that takes common sense -- doesn't it?

Senator Cassis, under her constitutional right of protest (Art. 4, Sec. 18), protested against the passage of Senate Bill No. 1168 and moved that the statement she made during the discussion of the bill be printed as her reasons for voting “no.” The motion prevailed. Senator Cassis’ statement is as follows: Yesterday both of our chambers unanimously approved a bold incentive package to attract the movie industry and commercial production companies. Michigan is now potentially one of the strongest in the country in terms of their position to now be able to compete. This is positive; it’s a good thing. But one provision in Senate Bill No. 1168 goes above and beyond tax relief. Once again, it provides a refund after removing all tax liability. What this means is, for example, if the company had a $500,000 tax liability and after all credits were added up, they had no tax liability, but the credits themselves were worth $600,000, essentially a refund check of $10,000 would be given to them in the mail. Yes, I know it’s been argued that other states may do so, but I have to ask this question: How many of those other states are in this profound economic recession that Michigan finds itself? We support credits, but going beyond and giving certain favored companies or businesses a check in the mail hurts all those other businesses that are here right now, today, paying taxes. They are not receiving any relief. They are trying to hold on. So let me say one more time: Expanding relief to all—large, small, medium-sized businesses, new ones, old ones—is the alternative that could make the most sense and just be the ultimate economic stimulus.

Senator Kahn asked and was granted unanimous consent to make a statement and moved that the statement be printed in the Journal. The motion prevailed. Senator Kahn’s statement is as follows: This bill ushers in a new day for us and the film industry. It’s a day also of bipartisanship going back to when Governor Granholm framed the notions of this package as a commitment by all sides to work together in an era of unprecedented cooperation. This is a time when we believe that expanding business and expanding a film package and looking at the notions of jobs as more than just about motion pictures or TV shows or commercials or documentaries or mini-series or video games—all of which will be incentivized by this bill and by the group that this is a part of. This is about jobs for our people, keeping our children at home, and hope for a recovery here. I urge the passage of this bill.

I'm glad that movies will be made in Michigan. But if we step back from the "feel good" part of this program, we see what is happening. The state is going to spend $xxx for whatever they feel like. Movies makers will receive credits, and potentially, refundible credits. The funding of those credits really comes from individuals and companies already in Michigan, to their detriment. So we are supporting a temporary transient industry at the expense of permanent residents and industries. Is this what you really wanted?

Lansing State Journal "Giveaways to film industry won't pave streets in gold" Jack McHugh and James Hohman March 30, 2008 Michigan legislators are rushing to grant extensive refundable tax breaks, government loans and even outright cash handouts to the film industry. Upping the ante from the usual discriminatory tax breaks betrays a tinge of desperation among business subsidy advocates. The film package is being sold as an economic development initiative, but it's unlikely to have any significant effect on this state's failing economy. That's because Michigan's current gross domestic product is nine times the size of the entire U.S. film and sound recording industry, according to the federal Bureau of Economic Analysis. A comparison with the auto industry puts this in perspective. In terms of personal income by industry, the entire U.S. "motor vehicle body, trailer and parts" industry accounted for $86.2 billion in 2006. Michigan got $22.1 billion of that, while California's share was $2.6 billion. The entire U.S. "motion picture and sound recording" industry was a bit more than one-fourth that size: $25.7 billion. Michigan's share was a measly $186 million, while not surprisingly, California got $15.3 billion. For context, the total personal income for Michigan residents was $341 billion in 2006. One could look at this state's tiny share of the film industry and rightly conclude there's room to grow. But not even the legislators who voted for the handouts or the governor who called for them can believe Michigan will ever get more than a tiny slice of that industry. And even if the Great Lakes State somehow managed to garner 5 percent of the nation's entire film production (half-again more than our "fair share" on a per capita basis), our state GDP would increase by a barely noticeable 0.6 percent. Looking at just the feature-film portion of the industry (the bill seeks to attract TV shows, music videos, sound recordings and more in addition), the Motion Picture Association of America reports 603 movies were released in 2007. To capture 5 percent of that, Michigan would have to attract the equivalent of 30 average-sized productions. Our chances of meeting that milestone are slim, given that scores of states are also looking to "pick each other's pockets" by using similar tax breaks and handouts to pursue the same Hollywood dreams. Reportedly, the just-passed package puts Michigan in line with the richest of these, offered by New Mexico and Louisiana. It's not as if Michigan is bidding for a role in a fast-growing industry, either. Film industry growth has been so dismal since 2002 that Michigan's faltering GDP growth rate has actually kept pace with it. Like all such targeted subsidy and tax-break programs, the main purpose of the film handouts will be to give the appearance of "doing something" while legislators avoid the heavy lifting of passing the broad-based tax, regulatory and labor law reform that would genuinely fix our broken economy. If they were less star-struck, legislators would finally begin the transformational restructuring and downsizing of government needed to make possible lower taxes for all job providers - not just those who hire movie stars.

Some forecast gain in state jobs with movie bills BY DAWSON BELL • FREE PRESS STAFF WRITER • March 31, 2008 LANSING -- The golden age of Michigan moviemaking is set to begin -- awaiting only the signature of Gov. Jennifer Granholm on a package of laws creating what state officials call the nation's most generous financial incentives for filmmaking. How generous? An uncontested state Senate Fiscal Agency analysis said the bottom-line cost of incentives for taxpayers for a single movie such as the $150-million production of "Transformers" -- partly shot in Michigan and released in 2007 -- would have been $47 million. And even a $4-million budget flick like suburban Flint native Michael Moore's 2002 hit "Bowling for Columbine" would have cost the state $300,000. The incentives approved last week by the Legislature include tax cuts and credits, loans and production assistance to lure movie, TV and videogame producers to bring their crews and equipment to Michigan. Buoyed by bipartisan acclaim, Granholm's enthusiastic endorsement and the backing of media figures like Free Press columnist Mitch Albom and actor-producer Jeff Daniels of Chelsea, the legislation sailed through the House and Senate with only one "no" vote. The key feature of the incentive package is a refundable tax credit worth up to 42% of the cost of production. The size of the tax credit, in many cases, would dwarf any tax liability, the fiscal agency said; the state would write a check to the moviemakers for the difference. A $100-million movie could be eligible for a subsidy of about $40 million. That led the fiscal agency to conclude that any additional revenues (say business, income and sales taxes incurred by the production company) "would be unlikely to offset completely, or in some cases, even offset significantly, the cost of the ... credits." The incentives already have sparked intense interest from the industry. The state's Film Office Director Janet Lockwood said Friday that 60 scripts have been submitted for review and potential qualification for incentives in just the last three weeks -- since it became clear the legislation would become law. That compares to a pre-incentive pace of about a half-dozen per year, Lockwood said. "We already have a film in pre-production," she said, "People are pulling shoots out of other states ... and moving them here. We have the best incentives in America, at least for now." That kind of frenzy -- and its attendant image-burnishing for Michigan -- was the principal rationale for the package. State Sen. Nancy Cassis, R-Novi, the only legislator voting against the incentives, called the refundable credits "categorically unfair" to business owners socked with big increases under the new Michigan Business Tax. Gary Wolfram, a former deputy state treasurer who teaches economics at Hillsdale College, said Saturday it would have been far cheaper for the state to just waive taxes for moviemaking altogether. As tax policy, the refundable credits are "completely nuts," he said. "We ought to hope this thing doesn't work and nobody makes movies, because if it does work it's going to cost us a fortune," Wolfram said. Rep. Andy Meisner, D-Ferndale, a lead sponsor, said the dramatic, targeted stimulus is what Michigan needs to break out of the economic doldrums. "We're in a state of economic crisis. People are looking for immediate answers," Meisner said. "This is an immediate boost. It's very real and more tangible than many of the other things we do." The movie and TV stimulus package will create jobs in a robust, growing sector of the economy that will more than offset the cost of the subsidies, he predicted. Tricia Kinley, director of tax policy at the Michigan Chamber of Commerce, said she is skeptical about the claims. The chamber "applauds anyone who can get a tax cut," Kinley said, "but from our perspective there are a lot of businesses that are here already, slugging it out in a tough economy and paying a lot of taxes." The entertainment industry is robust, Kinley said, but in Michigan it is dwarfed by other sectors, especially manufacturing, which aren't eligible for massive state subsidies. According to estimates by the Mackinac Center for Public Policy, a free-market think tank based in Midland, Michigan's share of personal income in the "motion picture and sound recording" industry was about $186 million in 2006 compared with $22.1 billion from "motor vehicle body, trailer and parts" manufacturing. Michigan's share of the entertainment sector could grow more than fivefold and have a "barely noticeable" effect on the state's gross domestic product, the Mackinac Center estimated. Boosters of the filmmaking incentive package predict the growth will be more dramatic, helping transform Michigan's economy and its image. Granholm is to sign the legislation as soon as arrangements can be completed for a formal ceremony, spokeswoman Liz Boyd said Friday. To read the Senate Fiscal Agency analysis of the movie and TV incentives package, go to http://www.legislature.mi.gov/documents/2007-2008/billanalysis/Senate/htm/2007-SFA-5841-F.htm. Contact DAWSON BELL at 313-222-6604 or dbell@freepress.com.