Snyder signs bill ending movie cash incentives

Gary Heinlein
The Detroit News

Lansing — Gov. Rick Snyder has signed a bill to eliminate state incentives for film and television productions in Michigan, ending a program that went from bang to bust in seven years.

While the state will stop granting subsidies to movie projects at the end of next year, Snyder said, it's important to keep the Michigan Film Office to assist producers who still want to shoot movies in Michigan locations. An earlier version of the legislation called for elimination of the film office.

"Michigan has much to offer the movie industry, including top-notch talent and beautiful backdrops that will continue to draw filmmakers to Michigan even without taxpayer-funded incentives," the Republican governor said.

Lawmakers backing the legislation said the state can't afford subsidies to draw filmmakers here — even when limited to $50 million annually in recent years — because the state needs at least $1.2 billion more a year for road and bridge repairs.

Michigan once had the nation's most-generous film incentives, offering direct cash rebates as high as 42 percent on verified spending for filming in the state. It attracted two "Transformers" movies to Detroit, while Clint Eastwood's award-winning "Gran Torino" filmed in Royal Oak and other Metro Detroit settings.

The bill signing is a significant shift from six months ago, when the Republican-controlled Legislature approved a seven-year extension of the $50 million annual program. It was scaled back from the more than $200 million taxpayers were shelling out in 2010 to land blockbuster flicks under the Democratic administration of former Gov. Jennifer Granholm.

When the Proposal 1 sales and gas tax increase ballot measure was rejected by 80 percent of statewide voters on May 5, GOP lawmakers interpreted it as a mandate to reprioritize more existing state spending toward road and bridge repairs.

"Given the election and the failure of Prop 1, the citizens gave us a different set of priorities and we were making sure those things that they think are important we're pursuing first," Senate Majority Leader Arlan Meekhof said told The News last month. The West Olive Republican voted for the original film tax credits in the House.

The film office has about $32 million in unannounced agreements with filmmakers that will still be honored.

The 2016 fiscal year state budget that starts Oct. 1 appropriates $25 million for the film incentives, but $19.05 million has to be dedicated toward repaying the state's pension system for a failed investment in a Pontiac film studio.

It leaves $5.95 million for the film office to lure television and movie production to Michigan next fiscal year. The legislation directs any unspent film incentives as of Sept. 30, 2016, back to the state's general fund.

The film incentives' end generated little outcry from remaining movie-related officials in Michigan last month when the Senate voted 24-13 to eliminate the subsidies.

Snyder convinced lawmakers to change the program in 2011 to a grant-based subsidy and the Legislature began funding $50 million for the last four fiscal years. He advocated an orderly and gradual end to the incentives but in the past year had embraced them as a way to promote skilled trades jobs.

But a movie industry infrastructure never took hold. At least five proposed or pre-existing studios in Metro Detroit have shut their doors since 2008 — and one proposed studio deal helped nearly bankrupt Allen Park and force a state-appointed emergency manager to take over the Wayne County city's finances for almost two years.

Michigan Film Office Commissioner Jenell Leonard vowed Friday the state will still try to build the film and digital media industries in Michigan.

"We are following a plan to provide services that cannot be provided by the private sector," Leonard said in a statement. "These services will include creative approaches to broadly promoting film and digital media production, spotlighting educational programs and jobs in the creative services industry, and building a communications network to expedite connections on production projects."

The film commissioner said the office would unveil initiatives "in the near future" to build the industry. "This is a time that calls for unprecedented collaboration."

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