The Senate Fiscal Agency now says that the film tax credit is a net drain on the state budget. Michigan Radio’s Jack Lessenberry believes it’s more complicated than that.
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State Senator Nancy Cassis of Novi has long been an severe critic of the Michigan film tax credit. She feels strongly that the state shouldn’t be in the business of picking winners and losers.
That businesses should succeed or fail on their own merits. Historically, there’s a lot to be said in support of that idea. What if, say, in 1900 the government had provided tax subsidies to those who made buggies, and not these hooligan newfangled automobile manufacturers. That might have badly hurt our economy.
Last Friday we got some new evidence that supported those who think the film credit is a glitzy negative. A new report from the non-partisan Senate Fiscal Agency said that the film credit has been a drain on the Michigan budget. They estimated that the film credit will cost our cash-starved state $111 million dollars in the year starting next month. Earlier, there was some awareness it was losing money, but supporters thought this was just growing pains.
However, the fiscal agency report couldn’t envision any situation in which this could turn around, and these tax credits add to state revenues. That would appear to be a death sentence.
Our state is poorer than ever. Right now, lawmakers are struggling to close a projected budget deficit for next year. Deep-sixing the film tax credit would appear to be the right thing to do.
As you may know, I’ve been talking for years about how the state needs to learn to live within its means.
And yet on this, I disagree. This may sound like a contradiction, but I think we need to keep the film tax credit in place.
That’s because in the words of the old women’s rights song, we need bread, but we need roses too. We need something exciting in our everyday lives, and what could be better than running into a movie star, or seeing them filming in your neighborhood?
Economically, the situation also isn’t as bad as all that. First of all, the amount of the loss is disputed by other studies. And even the Senate Fiscal Agency agrees the film industry has meant a net gain of $78 million for the private sector. Mark Adler, the director of the Michigan Production Alliance, told a Senate finance committee hearing that it takes time to build all the supporting infrastructure necessary for the movie business.
When this happens, the losses will be lesser, or even vanish. I do know this. There is something immensely valuable, even if intangible, in running into Clint Eastwood or Jack Nicholson on the street. There’s something wonderful about recognizing Detroit neighborhoods in a wonderful movie like Gran Torino.
Over time, I think this may even be financially valuable in a way we can’t measure, if it helps change the image of Detroit. Right now, much of the nation sees Detroit the way Mayor Dave Bing actually described it the other day -- as a hellhole.
Now, true, this could be a mixed blessing. The one show which consistently opens with a magnificent view of the Detroit skyline is an HBO series called Hung.
It concerns the adventures of a suburban coach who supports himself by having sex for money. The show opens with him walking down various Detroit-area streets and stripping off his clothes.
I suppose there’s a metaphor there somewhere.
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