Film incentive extension passes; bill returns to Senate

Gary Heinlein
The Detroit News

Lansing – — Michigan is on the verge of offering tax breaks to lure movie makers and TV productions to Michigan through September 2021 after the House passed a bill that sailed through the Senate in October.

The bill that passed the House on a 73-37 vote Thursday night would add seven more years to film and digital media tax rebates for productions made in Michigan. They’re currently set to expire in 2017.

It also 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.

Because the House version differs from the Senate-passed plan, which would have continued the film tax breaks indefinitely, the legislation will have to return to the Senate for another vote.

But Republican Senate Majority Leader Randy Richardville of Monroe, the chief sponsor who has been pushing lawmakers to keep the incentives in effect, said he’s OK with the extension the House approved.

“Seven more years — are you kidding?” Richardville told The Detroit News after the House made its revisions Wednesday. “Look how much it’s evolved since we started.”

Like most states, Michigan is trying to sort through conflicting claims and data to decide how much it wants to continue spending to lure productions.

Michigan first made waves in the industry with a 2008 law offering tax subsidies up to 42 percent for in-state productions. That drew Clint Eastwood’s award-winning “Gran Torino,” filmed with Metro Detroit backdrops.

Subsequently, the state film tax breaks were cut back. Producers now get tax rebates that have averaged 27 percent and cost the state up to $50 million a year.

Gov. Rick 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.

The nonpartisan Tax Foundation of Washington, D.C. says film-related tax write-offs are a handout to billion-dollar media companies by states and Canadian provinces competing against each other. It cites an Ernst & Young finding that Michigan’s incentives in 2010 amounted to more than $122,000 for each of the employees in the state’s industry.