June 6, 2014 at 1:00 am


State government picks winners, losers poorly

The Michigan film incentive is a good deal for Hollywood, but a bad deal for Michigan taxpayers, Beckmann writes. (Daniel Mears / The Detroit News)

The Michigan Legislature showed that it gets it by approving the “grand bargain” to help bail out the city of Detroit with a $195 million subsidy that appears to have enough oversight strings attached to ensure the city’s elected leaders don’t squander the funds in their treasury again.

The Michigan Constitution assigns responsibility for the economic health of local communities to the state government — something lost on those who opposed the appointment of Emergency Manager Kevyn Orr — and the “grand bargain” fulfills that obligation.

Detroiters should be thankful for the statewide investment in the city’s future represented by this legislative action. One can only hope that voters in Michigan’s largest city continue to elect more enlightened and responsible leaders in the future as they have with their recent selection of Mike Duggan as their mayor.

Now that this major piece of legislation is out of the way, it’s time for the Legislature to show some economic enlightenment on another issue that has been bleeding taxpayer money without real benefit — the state’s film subsidies.

This wasteful government handout has brought some of Hollywood’s biggest stars — George Clooney and Clint Eastwood among them — to our state for movie shoots, but what a price we’ve had to pay for the supposed honor of having them among us ever so briefly.

Michigan taxpayers have handed over well in excess of $100 million to Hollywood filmmakers to fund the subsidy program that was supposed to bring us in the neighborhood of 7,000 full-time jobs and create all sorts of financial benefit from the $800 million per year in annual economic activity, as projected in a study by Ernst & Young.

Supporters clung to those numbers as proof that the state was profiting from the subsidies. In fact, the opposite was true, since “economic activity” is not the same as tax revenue and the subsidies have far exceeded the money that has gone back into the state treasury.

As predicted, in this column and elsewhere, the self-serving crowd that promoted all the projected benefits was wrong from the start and Michigan taxpayers were left footing the bill, not earning so much as a discount at the box office for their largesse.

To his credit, Gov. Rick Snyder reduced the annual subsidy to $25 million last year, a good first step in saving Michiganians from further waste of their tax dollars.

Now, the Legislature has a chance to go even further.

To continue subsidizing Hollywood is to follow a fool’s errand of endlessly chasing a pot of gold that the self-promoters promise is just around the corner through the creation of a new industry — if we just give it a chance, and, of course, more taxpayer dollars.

Government, both state and federal, has a history of trying to backstop businesses, too often for the self-aggrandizement of the politicians involved, but some of it to the public’s benefit as well.

The auto bailouts come immediately to mind, as do the low-cost loans and subsidies to Michigan farmers after last year’s crop failures.

But a major question is worth asking about all these handouts.

By what measure do we judge which industries are worthy of taxpayer funding and which ones are ignored?

This week, Michigan golf course owners descended on the capitol to meet with legislators in an effort to emphasize the importance of their own industry.

The film folks pale by comparison to the roughly 850 golf courses already in existence in our state, businesses that employ more than 80,000 people and generate about $4.2 billion in revenue every year, all without taxpayer subsidies.

With the way so many Michigan courses have suffered extensive damage from the rough winter, those golf course owners could make a strong case for receiving the kinds of taxpayer assistance that was afforded the state’s crop growers when they were impacted by the weather, or what’s given to filmmakers just for gracing us with their presence.

If they’re going to insist on handing out our taxpayer dollars as subsidies, legislators would do us all a greater service by looking out for those who have invested in the state and created real economic benefit, like the golf industry, rather than funding the pie-in-the-sky promises of film credits, which have drained the treasury and show no signs of reversing form if those handouts are continued.

Frank Beckmann is host of “The Frank Beckmann Show” on WJR-AM (760) from 9 a.m. to noon Monday-Friday.