Snyder defends film incentives from legislative ax
Lansing — Gov. Rick Snyder said Tuesday he opposes total elimination of Michigan’s $50 million-a-year subsidies for the film industry, even as the Republican-controlled House appears poised to ax the program.
The House on Tuesday gave first-round approval to legislation that would end new taxpayer-funded incentives to lure movie and television productions to the Great Lakes State, starting on Oct. 1. A final vote is expected Wednesday.
“I don’t think that would be the most appropriate answer because, again, people have been relying on it, been making decisions on it, so you do it some gradual fashion because the industry should be self-sufficient at some point in the future,” Snyder told reporters Tuesday after an event at the Capitol.
Snyder included $50 million for the program in his 2016 fiscal year budget, after trying to repeatedly set film incentives at $25 million in past years. Snyder also cut $12 million from the current fiscal year as part of a budget-cutting bill to close a $325 million deficit.
When he entered office in 2011, Snyder convinced lawmakers to rein in the cost of the film industry subsidies, which had ballooned to more than $200 million through a more generous tax credit that’s no longer offered. The amount of available cash grant incentives has since been capped and subject to annual appropriations battles in the Legislature.
“I don’t view (that) simply turning it off is the appropriate answer,” Snyder said.
Last week, the House Tax Policy Committee voted 8-3 to end the film incentives program.
State Rep. Dan Lauwers, the bill sponsor, has said the state can no longer afford the program in light of hundreds of millions in budget-busting tax credits owed to businesses.
The House amended the bill Tuesday to create a grace period for filmmakers who get awarded a grant before the end of the 2015 fiscal year on Sept. 30. Those projects would have one year to complete the project to get reimbursed for qualified production and personnel expenses, Lauwers said.
“If you’ve got a contract, it’s good,” said Lauwers, R-Brockway Township. “We’re not changing those at all.”
Livonia Rep. Laura Cox, chairwoman of the House’s general government appropriations subcommittee, told The Detroit News last week that she intends to propose a “significant cut” to Snyder’s proposed $50 million funding for the 2016 budget year.
The House also adopted another amendment that redirects any unspent 2016 fiscal year funds to repay a state pension fund for losses incurred on $18 million in bonds it guaranteed for the construction and operation of Raleigh Studios, a film production studio in Pontiac.
Just three months ago, with a different set of legislators, the House and Senate approved extending the film incentives program through September 2021. Snyder signed the extension in December.
That legislation was championed by then-Senate Majority Leader Randy Richardville, a Monroe Republican who was forced from office last year because of term limits.
Richardville’s support for the film incentives has been carried on by his successor, Sen. Arlan Meekhof of West Olive, who has said the program has been helpful in creating job opportunities for carpenters and skilled trades workers.