Mich. House votes 58-51 to end film incentives

Gary Heinlein and Chad Livengood
Detroit News Lansing Bureau

Lansing – — One day after Gov. Rick Snyder argued it's too soon to end Michigan's film incentives, the GOP-controlled House passed legislation Wednesday that would kill them on Oct. 1.

"What matters is the bottom line and that is this: We simply cannot afford to subsidize this business, or any business, with our constituents' money," said Rep. Dan Lauwers, R-Brockway, the bill sponsor.

Rep. Ed McBroom, R-Vulcan, said his Upper Peninsula constituents support ending the film incentives program.

"You want to fix the roads? Get rid of the film credits. You want to fix schools? Get rid of the film credits. I've heard it again and again and again," McBroom said.

The vote was 58-51, with several Republicans joining Democrats such as Rep. Jeremy Moss of Southfield to oppose the bill.

Moss said movies shot here because of the incentives create jobs that "are highly sought after, well-paying and individually rewarding," and they help to create a "buzz" about the state extending far beyond the reach of the "Pure Michigan" tourism campaign that's costing millions of dollars a year.

Rep. Kristy Pagan, D-Canton, maintained that every dollar spent on film credits creates $10 in economic activity, adding that there's also the "cool factor" to consider.

"Who doesn't want to see a Ben Affleck or Amy Adams walking down our streets?" Pagan wondered.

Although Democrats vigorously defended the film incentives and Republicans trashed the program during floor debate, the vote was not entirely along party lines.

Democratic Reps. Harvey Santana of Detroit and John Kivela of Marquette joined 56 Republicans in voting to end the program. Republicans who joined 45 Democrats in voting no were Reps. Mike Callton of Nashville, Kathy Crawford of Novi, Ben Glardon of Owosso, Peter Lucido of Shelby Township, Mike McCready of Bloomfield Hills and Jason Sheppard of Temperance.

Lauwers' bill faces uncertain prospects in the Senate, where Majority Leader Arlan Meekhof, R-West Olive, shares Snyder's view that the program has had benefits. The governor, who favored elimination of the incentives when he took office in 2011, said Tuesday they shouldn't be axed quickly.

"People have been relying on it and are making decisions based on it, so you do it in a gradual fashion because the industry should be self-sufficient at some point in the future," Snyder said.

Lawmakers last year extended the film incentives program for seven more years, so the House plan approved Wednesday would represent an abrupt reversal. Snyder's proposed 2015-16 budget includes funding the incentives for $50 million.

But in the past month he cut $12 million from the current year's $50 million film credit allocation when a $325 million mid-year budget deficit arose.

Films such as last year's "Batman v Superman: Dawn of Justice," shot in Detroit and Lansing, can qualify for business tax rebates up to 25 percent of direct in-state production costs.

House members squabbled over how the superhero movie, which has finished filming but still awaits release, worked out for the state.

Rep. Jeff Farrington, R-Utica, said the state provided a $35 million tax break for a film with a $30 million payroll. Moss said direct spending in Michigan on the production came to $131 million.

Michigan Chamber of Commerce CEO and President Richard Studley said the House vote "illustrates which representatives are serious about cutting wasteful spending and those who are fine supporting government boondoggles." The chamber wants to end the incentives.

House Democratic Leader Tim Greimel of Auburn Hills said ending them makes no sense because they "created thousands of jobs, elevated Michigan's profile on the international stage and successfully marketed Michigan as a place where natural beauty meets modern technology and a skilled workforce."

gheinlein@detroitnews.com