Senate OKs bill extending film subsidies for 7 years

Chad Livengood and Gary Heinlein
Detroit News Lansing Bureau

Lansing — Legislation cementing Michigan’s taxpayer incentives for filmmakers in law for the next seven years is headed to Gov. Rick Snyder’s desk for his consideration.

The Senate overwhelmingly approved a bill Tuesday that would continue the state’s incentives to lure movie-makers to Michigan through September 2021. The House added the sunset date to Senate Majority Leader Randy Richardville’s bill last week that would have continued the subsidy program in perpetuity.

The incentives are currently set to expire in 2017. Richardville, R-Monroe, a strong supporter of Michigan’s film industry, said the incentives have opened opportunities for Michigan residents to find careers to develop careers in the film industry, and he hopes they will continue.

“We need to build more careers rather than just jobs and that’s why I’m hoping that this funding continues for a long time,” Richardville said after passage of the bill during Tuesday’s Senate session. “Young people stay here because it’s an exciting industry.

“Some people left the state that were working in this industry. It would be nice to have some of them come back.”

The House-amended bill does not involve state funding amounts, which are determined through the annual budgeting process. But the legislation would set the tax rebate at 25 percent for in-state production costs, down from a current range that goes as high as 32 percent.

Richardville, who is term limited and the most vocal supporter for film industry subsidies, said the seven-year stability for the program will help build a permanent film and television production industry in Michigan.

The bill eliminates a $2 million limit on how much a movie maker could pay an individual actor or worker, which is viewed as helping to attract big-budget movies with high-profile celebrities, such as the Ben Affleck “Batman” flick that finished filming in Michigan in October.

“If the film does successfully over a long period of time, some of that money will now come back to Michigan,” Richardville said. “We would be able to tax the benefits that they get for years to come, which wasn’t the case before.”

Super hero movies are viewed as a possible boon to in-state facilities such as Pontiac’s Michigan Motion Picture Studios, which has supporters such as the Taubman family and Walbridge Co. Chairman and CEO John Rakolta Jr.

The Pontiac studio, formerly known as Raleigh, missed making studio construction bond payments, forcing the State of Michigan Retirement Systems to make $1.68 million in payments over two years under a studio guarantee by the former Granholm administration, according to the state Treasury Department.

The law was changed two years ago to ensure Michigan public pension funds no longer can make such guarantees, Treasury spokesman Terry Stanton said Tuesday.

But in a nod to smaller projects, the legislation requires the program award at least 10 percent of its annual funding to television series, documentaries or movies with a budget of less than $15 million.

Michigan first made waves in the industry with a 2008 law offering tax subsidies up to 42 percent for in-state productions. It drew Clint Eastwood’s award-winning “Gran Torino,” filmed with Metro Detroit backdrops, among other movie-makers. Two “Transformers” movies as well as the George Clooney and Ryan Goosling flick “The Ides of March.”

Subsequently, the state film tax breaks were scaled back after the annual cost to the state’s coffers topped $200 million in one year. Producers now get tax rebates that have averaged 27 percent and cost the state up to $50 million a year.

Snyder has proposed setting an annual limit of $25 million on awards to in-state productions each year, citing a 2011 estimate that Michigan gets a return of 28 cents in tax revenue for every dollar in tax subsidies awarded film productions.

At least seven states, including neighboring Wisconsin and Indiana, have ended their incentive programs or stopped funding for them in the past few years, according to the National Conference of State Legislatures.

Staff Write Karen Bouffard contributed.

(517) 371-3660