Worker says ending film incentives will cost Mich. jobs

Gary Heinlein and Chad Livengood
Detroit News Lansing Bureau

Lansing — A House committee voted Wednesday to end the state’s $50 million-a-year subsidy for film and television production in Michigan on Oct. 1, setting up a potential budget battle in the weeks to come.

The House Tax Policy Committee voted 8-3 to send film subsidy-ending House Bill 4122 to the full House, with Reps. Michael Webber, R-Rochester Hills, and Paul Clemente, D-Lincoln Park, abstaining from voting.

The committee voted quickly and without discussion — testimony was taken a week ago — as industry representatives attended the meeting in opposition to the legislation. Supporters of the movie incentives say they are needed to compete with other states, foster a thriving digital media industry that offers high-paying skilled trades jobs and attract well-educated young people.

The new effort to kill the film subsidies comes less than three months after the last Legislature voted in December to extend the life of the program through September 2021. It allows state tax rebates for up to 25 percent of direct production expenditures on projects filmed here.

In light of the state’s budget constraints, conservative Republican House members are itching to ax the program.

State Rep. Dan Lauwers, bill sponsor, said the state can’t afford a $50 million film industry subsidy next fiscal year in light of an estimated $807 million in tax credits owed this year to Michigan-based companiesother than film companies.

“We’ve got limited resources, so let’s make good on the commitments we have, but not incur any new ones,” said Lauwers, a St. Clair County Republican.

Lauwers said the film incentives also look bad politically as voters prepare to go to the polls on May 5 to decide the fate of the Legislature’s plan to raise the sales tax from 6 percent to 7 percent as part of a plan to boost road funding an extra $1.2 billion annually.

“That’s what I hear from my constituents loud and clear,” Lauwers said. “How can you be asking for additional new taxes … for roads when you continue to give cash reimbursements to Hollywood?”

Ferndale resident Patrick Kelly, a carpenter who has found steady work on films shot in Michigan, said lawmakers should stick with the seven-year commitment they have made to grow the industry.

“A lot of jobs are going to be lost,” said Kelly, who belongs to a film industry trade union. “There are jobs on the line they’re not even counting. We feel confident eventually we’ll win, but it’s affecting the business; the instability does have an impact right now.”

Kelly, who has worked on the “Detroit 1-8-7” and “Low Winter Sun” TV series and such movies as “Oz the Great and Powerful” and “Batman v. Superman: Dawn of Justice,” said the industry isn’t like 9-to-5 jobs but pays well for irregular hours.

“I’ve worked for nine months, 60-70 hours a week. I’ve worked 22-hour days,” Kelly said.

“If you have a full-time job at McDonald’s, I’m telling you right now you’d rather have this job. It should be a nonpartisan issue — we’re creating jobs in Michigan.”

But House Republicans, backed by the Michigan Chamber of Commerce and free-market Mackinac Center for Public Policy, want to greatly reduce or end state spending to lure movie and television production to Michigan.

Rep. Laura Cox, chairwoman of the House’s general government appropriations subcommittee, said Wednesday she intends to propose a “significant cut” to Gov. Rick Snyder’s proposed $50 million funding for the 2016 budget year.

Cox, R-Livonia, would not say how much of a reduction she wants because she hasn’t talked yet to other committee members.

“It’s going to be cut, it’s just to the degree that it’s going to be cut,” Cox told The Detroit News. “I’m going to propose a significant cut.”

Cox’s committee took testimony Wednesday from a leading critic of the film incentives program, which is part of the Michigan Economic Development Corp. budget.

“We feel very strongly that it is time and overdue to finally end the costly film subsidy,” said Tricia Kinley, senior director of tax and regulatory reform for the Michigan Chamber.

“This is an arms race that Michigan will never win. Michigan will never keep up with the demands of Hollywood executives.”

While Lauwers’s bill is expected to sail through the GOP-controlled House, it may face a tougher road in the Senate.

Senate Majority Leader Arlan Meekhof, R-West Olive, has expressed support for the program because of the job opportunities film production creates for skilled trades carpenters and electricians building movie sets.

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