Michigan film incentives targeted for cuts

Chad Livengood and Gary Heinlein
Detroit News Lansing Bureau

Lansing — Gov. Rick Snyder proposed Wednesday to cut $12 million in film and television incentives to address a current-year budget shortfall but wants to restore funding to $50 million for the 2016 fiscal year.

The Michigan Film Office hasn't spent any of its $50 million for new movie projects in the current fiscal year, so Snyder plans to withhold $12 million from, spokesman Dave Murray said. It will help reduce a $325 million general fund deficit.

But in his 2016 fiscal year budget, Snyder proposes restoring funding to $50 million, double the amount the governor has recommended in prior years. But the incentives for television and movie production companies that film in Michigan remains a target for cuts among some legislative Republicans, including House Speaker Kevin Cotter.

"I think that it has not produced the results that we should see after this period of years of investment," said Cotter, R-Mount Pleasant.

The Republican governor has never been a fan of the film incentives program, which once topped $200 million annually. In his first year, Snyder tried to end the subsidies, but ultimately agreed to a $25 million spending cap.

During the following three fiscal years, the Legislature appropriated $50 million toward luring Hollywood motion pictures to the Great Lakes State, but only after Snyder initially recommended $25 million. The extra money was largely the result of the advocacy of former Senate Majority Leader Randy Richardville, who is no longer in the Legislature to defend the program from the budget ax.

House Appropriations Committee Chairman Al Pscholka, R-Stevensville, said the film credits and all tax credits "are going to get a thorough review."

New state Rep. Laura Cox, who heads the subcommittee dealing with the film credits, said she is predisposed toward reducing the amount.

"I think a paring back is appropriate," said Cox, R-Livonia, who chairs the Appropriations Subcommittee on General Government. "It's a pretty big pot of money, and I'm pretty sure the numbers show they aren't paying for themselves."

If Snyder isn't prepared to trim the film budget, "he can give it to us and let us make the cuts," Cox said.

Michelle Grinnell, spokeswoman for the state film office, said the agency put a hold on awarding incentives for new film and television projects late last year while the Legislature finalized extending the life of the program by seven years.

"We have since resumed application processing under the terms of the new programs and expect we will have some announcements to make soon," Grinnell said in an email.

Those who work in Michigan's film industry are cautiously optimistic lawmakers will come to see the potential of a burgeoning digital media industry that goes beyond traditional movie-making.

"Film and digital media is one of the top-three growth industries in the country, which is why Republican states like Louisiana and Georgia are fighting for them," said Joseph Scott Anthony, an actor, producer and president of the Media Arts Coalition of West Michigan in Grand Rapids. "This may be the most important future industry a state can have. Think about it: Infants now are being handed smartphones and tablets nearly from birth. We want to be the state filling those screens with content."

The industry fosters "high-paying, educated jobs" that can keep young people in Michigan "revitalizing inner cities like Detroit and Grand Rapids," Anthony said.

The film office is an agency under the umbrella of the Michigan Strategic Fund and the Michigan Economic Development Corp., which is under fire from some lawmakers for issuing budget-busting tax credits for businesses.

In one of his final acts in the Legislature, Richardville got Snyder to sign a law setting the tax rebate at 25 percent for in-state production costs, down from a previous range of as high as 32 percent.

The law also keeps the film incentives program in place through September 2021, though the funding remains subject to annual appropriations by the Legislature.

While the debate over film subsidies have focused on the payouts to profitable Hollywood production houses, some have argued there are residual effects on the state's economy that can't be ignored.

Senate Majority Leader Arlan Meekhof, R-West Olive, said film production in Michigan has created employment opportunities for skilled trades workers building movie sets.

"I don't think that's being counted at all with these folks that are no longer unemployed, who are skilled electricians, carpenters and all those folks who get to apply their trade in the film industry," Meekhof said.

Anthony noted that state film incentives have Michigan in the running for several more comic book superhero movies from producer-director Zack Snyder alone. Key scenes for his "Batman vs. Superman: Dawn of Justice" were filmed last year in Detroit and East Lansing.

The producer has announced plans for "Justice League: Part One" and "Justice League: Part Two" as initial successors in the same genre. As many as nine films, each with $100 million to $200 million budgets, could bring $1 billion worth of movie making here, Anthony said.

"He already said Detroit has been established as Gotham City (Batman's fictional hometown)," Anthony said. "We'd be a candidate for all of them."

clivengood@detroitnews.com

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