The Michigan house on April 28 passed Gov. Rick Snyder’s proposed budget bill — the one that axes all business incentives, including those for film production in the state.
While the bill does not include the governor’s proposed $25 million film cap (which is in a different proposal of the governor’s, separate from the new business tax) – there’s still hope, says Michigan film consultant Ken Droz. He is an officer of the non-profit Amend, Don’t End Coalition for Michigan’s Film and Digital Media Incentives.
“The Senate still has to weigh in on the issue and we feel we have a better shot of retaining the incentives with the Senate,” he says, noting that the Senate majority leader is a supporter of Michigan film production.
During the short window between now and the Senate vote on the bill intended to happen by July, “The battle to preserve the incentives will take place,” says Droz, when Amend, Don’t End will be working overtime to raise funds for lobbying and legal services.
”We need to get the message across how the film industry has increased the workforce and built an infrastructure, and how the $25 million in incentives is simply inadequate to support it.”
Amend, Don’t End has formulated a number of counter-proposals. One is to reduce the incentive by more than 20% from the present top-tier 42% to a still-competitive 32%. Another is to cut non-Michigan labor payments – the most contentious part of the incentives – starting with 25% in 2012 and dropping to 10% over five years.
Also proposed: A 2% investment incentive for: postproduction performed in Michigan; when 80% or more of both Michigan residents and total payroll, or production takes place at “qualified facilities” in Michigan to encourage use of local infrastructure.
Should the governor’s proposed $25 million film cap pass the Senate and the House, it won’t officially go into effect until Michigan’s fiscal year starts in October, 2011.
Paltry number of jobs to derive from seven 2011 projects
Meanwhile, the Michigan Film Office has been doling out selective tax credit approvals as though the $25 million cap is already law, in an attempt to stretch that amount for projects throughout the year.
So far in 2011, the MFO has approved seven projects, with $10.6 million in incentives being awarded on $25.6 million production expenditures. They are expected to create 617 Michigan hires with a full-time equivalent of 142 jobs.
These are meager numbers compared with nearly $300 million in 2010 was generated from 58 approved movies and TV series, out of 119 applications. These projects employed 5,310 Michigan production hires, and more than 8,179 hires as extras and day players.
Some of the new businesses that opened in Michigan last year to provide critical infrastructure to the film industry included the $80 million, nine-stage Raleigh Studios in Pontiac, Fletcher Camera and Lenses in Farmington Hills, Lowing Light & Grip in Grand Rapids, With a Twist Studio in Rochester Hills and I.E. Effects in Traverse City.