The film industry first made its appearance in Michigan during the Post-World War II era with 319 productions in total having been filmed in the State of Michigan. In recent years, the film industry in Michigan has been a controversial one, having been addressed by several pieces of legislation over the years.
. In 2008, former Governor Jennifer Granholm signed into law Public Acts 47 through 87, which first established the film incentive program in Michigan. These incentives included a 40% subsidy for covered personal expenditures with a possible 2% increase if produced in a Michigan community. Upper-level film employees could receive a 40% credit on salaries, even if they were non-residents. Lower-end workers could receive 40% if they were residents and 30% if they were not. The construction industry was also eligible for a 25% subsidy for capital improvements and film-related projects. On-the-job workers would also be covered with a Film and Digital Media Job Training Tax Credit, a 50% credit that applied to training expenses of Michigan workers.
These incentives resulted in the formation of several new film-related organizations in Michigan and the expansion of the others. The Michigan Film Office was established in 1979 to assist the industry but began with only one employee. That office has now grown to six employees. The Michigan Production Alliance was also formed in addition to numerous unions and alternative organizations.
Just two years after these incentives were placed, Governor Rick Snyder took office and signed Public Act 291 of 2011. Public Act 291 restricted the original program and capped the funding at $25 million. Michigan had previously had a 42% credit, one of the highest in America. The restrictions specified in the Act included a list of projects eligible to receive credit and the criteria they must meet to attain it. Approved projects were motion pictures, documentaries, television series, miniseries, interactive television, music videos, interactive games, video games, Internet programming, sound recording, digital animation and interactive websites. Projects must be financially sound, use existing Michigan infrastructure, provide a number wage levels for possible Michigan workers created by its production, promote Michigan positively, and a magnitude of estimated costs in Michigan.
With the decrease in funding, the film industry experienced a gradual decline in the amount of film related employment. Even before Governor Snyder signed his Act, several projects were stuck in limbo as the legislature took its time to decide. This resulted in producers considering other locations for their work and Michigan losing out on potential business.
In 2015 the issue again appeared in the state legislature when several representatives presented House Bill 4122, referred to the House Tax Policy Committee. This legislation includes a sunset clause that would effectively end any and all film incentives beginning October 1st, 2015. It has since adopted a substitute to amend the bill. On March 10th, the house adopted H-2, which provided that all current credits will be granted and followed through, and any leftover funding will be used to pay back the state employee pension fund, which invested in a film studio in Pontiac.
Testimony for and against this bill took place February 25th with several representatives from the industry present along with a spokesman from the Michigan Economic Development Corporation (MEDC). The main arguments in favor of the legislation stated that with the current economic situation and the budget restrictiveness at hand, the film incentives simply were not a sound investment. The MEDC presented data that showed that not one permanent job had been created by this industry, and that Michigan was in an arms race that it could not win.
There was far more testimony and opinions for the opposition to the bill. Several spokesmen commented on the benefits the film industry brought to the state including notoriety, local economic stimulation, and experiences. Filmmakers coming into the state are using Michigan materials, eating at Michigan restaurants, and staying in Michigan lodging. One representative displayed a large stack of articles from out-of-state filmmakers commenting on how excellent Michigan workers were and how much they enjoyed being in Michigan. To counter the job creation argument, it was pointed out that these jobs are usually 6-9 months but carry an entire year salary. In the state, these are viewed as part-time jobs due to their duration but are making a full-time salary. These jobs can be compared to construction work in that workers are employed for the duration of the project and then seek another once the job is completed.
Governor Snyder did not testify at this committee hearing, but has since publicly supported a gradual removal of film credits. Although he set to rid the state of the film credits in his budget proposal, the Governor has since clarified that he does not feel it is pertinent to remove them rapidly.
The film incentive program has been established in Michigan for about seven years. In these seven years, it has not been given ample opportunity to prove it’s worth to the state. Over these years, the legislature has been deciding, reconsidering, and deciding again. In their indecisiveness, the legislature has thwarted these projects into limbo and Michigan loses economic opportunities. Michigan needs incentives to be competitive in this industry and if the Legislature has any interest in keeping this industry in the state, it will not pass HB 4122.
This bill has been passed through the House of Representatives and currently has been assigned to the Senate Committee on Government Operations.
Bordman, Ethan. "Entertainment Law in Michigan: The Film Incentive." Entertainment Law in Michigan: The Film Incentive (n.d.): n. pag. Michigan Film Incentive. Michigan Film Incentive, 1 Jan. 2011. Web. 6 Mar. 2015.
Froehlich, Erin. "HB 4122." Notes from Committee Hearing. Proc. of House Tax Policy Committee, Lansing, MI. N.p.: n.p., n.d. N. pag. Print.
Gray, Kathleen. "Kill Michigan Film Incentives? Not so Fast, Snyder Says." Detroit Free Press. Detroit Free Press, 10 Mar. 2015. Web. 31 Mar. 2015.
Lawler, Emily. "Michigan Film Incentives Would Be Axed under New Legislation." MLIVE. Advance Digital, 20 Feb. 2015. Web. 07 Mar. 2015.