The Oscar for Bad Politics – Mackinac Center

Editor’s Note: An abridged version of this piece first appeared in the Traverse City Record Eagle on April 6, 2022.

Some state lawmakers are again toying with the idea of ​​Michigan taxpayers funding film production here. The last time officials tried to bring movie magic to Michigan, it cost taxpayers a whopping $500 million and produced next to nothing.

There is no independent evidence that underwriting television, movies, and similar commercial work in the state would be of net benefit to Michigan taxpayers. Indeed, there is overwhelming evidence to the contrary. Not only do these grants not work as advertised, they make it more difficult to provide other necessary services, repairing potholes being just one example of many.

The bills under consideration would provide tax credits on expenses incurred for Michigan-based film and television productions, as well as commercial filming. The tax credits would be equivalent to 20 to 30% of production expenses. The program would grow over time and cost up to $100 million a year.

There are several problems with this bill.

It does not work. Eighteen states across the country offer no incentive programs for film and television, likely because their lived experience matches research showing they’re ineffective, even in California where there’s already a strong production infrastructure. Entertainment.

A 2019 study of Georgia’s tax credit (up to 30% of video and movie expenses) found that even if every job in Georgia in this category were based on incentives, the program would still cost between $64 $000 and $119,000 per job, which is obviously not profitable. This is far from the only study that has found questionable or clear negative impacts of state film incentives.

Three analyzes were performed on Michigan’s previous movie incentive program. Two of them questioned the effectiveness of the program. The first was a review by the state’s nonpartisan Senate Tax Agency in 2010. It found the program earned just 11 cents on every dollar spent. The second study, published in 2014, was conducted by a Massachusetts-based consulting firm at the request of the Michigan Economic Development Corporation. He also found that the program was a drain on the treasury.

The third study was also purchased by the MEDC. It was released in 2009, just over a year after the program was created. The authors of this study found positive results from the program. But the study had questionable merit since it excluded all costs associated with the state inducement. This is like counting only your paychecks while ignoring your bills. That’s not how the real world works.

The program is also expensive. We have already wasted $500 million subsidizing films and other media productions. Even if the new program only gave up $50 million a year, the total cost would add up quickly, probably with nothing to show for it. In addition to the direct cost, there is also the opportunity cost. Tens of millions of one-time tax benefits for some filmmakers is money that can’t be spent on roads, sewers, police, or lowering the cost of living for everyone.

It is fundamentally unfair to give tax credits to a few while the rest of us pay full price, especially when the benefits of these programs flow to those who should need them least. Michael Moore, wealthy founder of the Traverse City Film Festival, pocketed $840,000 from Michigan taxpayers for his mockumentary “Capitalism: A Love Story,” according to the New York Times.

How ironic that Moore’s 2009 ‘capitalism’ received a state subsidy when one of his famous scenes shows Moore standing in front of a Wall Street business with a bag demanding the return of taxpayers’ money. Michigan taxpayers should also demand their money back, and start with industrial donation recipients like Moore. This is not the only example of apparent favouritism.

At least one state legislator and the head of the Michigan Film Office have received cameos in productions here. US Senator Debbie Stabenow and former Senate Majority Leader Randy Richardville were even extras in “Batman vs. Superman: Dawn of Justice.” Maybe they got roles just because they’re great actors.

Some politicians believe movie incentives create jobs. Evidence and experience show no. Until supporters of public film subsidies prove otherwise, taxpayers should be crying, “It’s over!” on the failed idea of ​​lawmakers.


Permission to reproduce this blog post in whole or in part is hereby granted, provided proper attribution is given to the author (or authors) and the Mackinac Center for Public Policy.

About Christopher Easley

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