Archive for the ‘General Industry News’ Category

http://www.freep.com/article/20100829/OPINION05/8290430/1068/opinion/How-film-tax-credits-gave-me-a-foot-in-the-door

BY GLEN McGEE

I am a 25-year-old former autoworker who has found work in the film industry.

After working at General Motors Orion Assembly for three years, I decided to take part in the most recent round of buyouts.

I attended Oakland University for a semester of cinema studies and landed an internship on a low-budget, independent sci-fi film that was shot in Pontiac. After another internship, I was hired as a production assistant on another film. Through the connections I made on that film, I was hired on another.

These projects have allowed me to learn the industry and make connections. The incentives that attracted these films brought the possibility of achieving a dream.

It’s my goal to work as a talent or package agent, who recruits key staff for films, at one of the four major entertainment agencies. Through a lot of hard work and perseverance, this dream is quickly becoming more and more possible.

Shorter lines at home

Hundreds of young people with dreams like mine flock to Los Angeles and New York only to meet the near impossibility of making headway. However, with Michigan’s film incentives, the work is coming here, and there are hundreds of young people like me who have grand dreams that are coming to fruition.

Aside from us young dreamers, there also are a great number of former auto, construction and transportation workers who have found work driving, building, painting and other work on films that are coming to Michigan.

We’re all watching November. If elected officials pull the plug on the incentives, there’s going to be a lot of us out of work.

This is an industry that some do not understand. People are only employed for the duration of the show. These are freelance jobs, but they are good-paying jobs. Some say the incentives haven’t brought permanent jobs to Michigan, which is technically true. But that’s not how the industry works.

Also, these incentives have been in place for just two years. For more local people to be staffing the films, more local residents need to gain the experience and education they need to move up on the credits.

Working their way up

There are a number of colleagues I have worked with who started as interns and are on the verge of being production coordinators. The next step is a line producer and unit production manager. And from there they could wind up producing films. But local people can’t get these jobs if there aren’t films here for them to cut their teeth on.

I ask voters, please, when going into the voting booth this November, think of the thousands of local people working on these films, the twenty-somethings achieving dreams they never thought possible, and the local business owners whose profits have soared thanks to the film incentives.

I won’t tell you who to vote for. I just ask that your vote ensures the longevity of the incentives and the people they affect.

Glen McGee, of Flint, is a production assistant on the upcoming movie “Transformers 3.”

http://www.freep.com/article/20100819/OPINION05/8190369/1068/opinion/Jobs-dont-star-in-Michigans-film-industry-tax-credits

BY MICHAEL D. LAFAIVE

Like the “great and wonderful Oz” of the silver screen, Michigan’s film subsidy program continues to dazzle. When Toto pulls back the curtain, however, the reality disappoints. This particular “jobs program” is all flash and no net job creation.
Sticking taxpayers with up to 42% of the expenses incurred by film productions here, the program also underscores Michigan government’s schizophrenic tax policy that keeps overall taxes too high to attract job providers, but cuts taxes or writes subsidy checks for a handful of politically favored firms or industries.

The program is expected to cost $155 million in the coming fiscal year. Even as the size and generosity of such programs have grown, the state’s fortunes have declined. Michigan lost a decade of economic growth, from 1999 to 2008, and our unemployment rate was the highest in the nation for 49 straight months. The film incentives are the poster child for our expanded corporate welfare regime, redistributing tax dollars from the many to a favored few with no net economic benefits.

The other component of our self-destructive tax policy is the $1.4 billion in personal income and business tax increases approved by the Legislature in late 2007, including a 22% surcharge that’s projected to suck $522.6 million from job providers’ depleted coffers next year. A few months later, lawmakers approved Gov. Jennifer Granholm’s plan to redistribute some of this income to a small number of film-related companies.

From 2007 to 2009, the average number of jobs in the state’s motion picture and sound recording industry actually fell by 10%, according to federal Bureau of Labor Statistics. Rather than reassess the value of these subsidies, the state’s corporate welfare bureaucracy last year commissioned a study claiming they created 1,100 new jobs. The press release did not reveal that the paid consultant who did the work ignored 100% of the costs associated with the program, essentially invalidating the results.

At the same time, the Michigan Economic Development Corp. and the Michigan Film Office have cloaked details about the program in secrecy. One official claimed that he couldn’t even discuss whether a particular $10-million subsidy had been approved.

Political support for the program was nearly unanimous when it was created, but that’s starting to change. During the recent gubernatorial campaign, candidate Rick Snyder said he wanted to phase out the incentive, while Tom George and Mike Cox said they wanted to limit the handouts. Michael Bouchard and Pete Hoekstra appeared conflicted, criticizing the picking of winners and losers, but not calling for repeal. Andy Dillon supported the incentives and wanted to expand them to the production of commercials. Virg Bernero supported film incentives — as long as they have a significant return on investment.

At best, these selective tax break and subsidy programs merely redistribute jobs, not generate net employment increases. A better solution is to stop treating taxpayers like gullible rubes and rescue Michigan’s moribund economy with across-the-board tax and regulatory relief.

Michael D. LaFaive is director of the Morey Fiscal Policy Initiative at the Mackinac Center for Public Policy, a research and educational institute headquartered in Midland, Mich.

http://gothamist.com/2010/08/08/man_headbutts_pa_on_set_of_premium.php

One Upper West Side man had the courage to do what every New Yorker diverted from his or her normal walk home by a film crew has wanted to do, and headbutted a production assistantworking on the Joseph Gordon-Levitt flim Premium Rush (which has already taken its toll on the young actor).

Breffny Flynn, 43, was told he had to wait a few minutes to cross the street at Broadway and West 102nd Street yesterday morning because they were filming a fast-paced action scene. Flynn lost his temper. Witnesses said he yelled, “I live here! I pay taxes!…Don’t tell me what to do, motherf- -ker!” before leaning back and headbutting PA Steve Lafferty in the face. Flynn was arrested for assault, and Lafferty was taken to St. Luke’s hospital. One crew member said, “It looked like his nose was broken, and his eyes were puffy.” However, Flynn’s wife said the PA pushed her husband first, and even if he hadn’t Flynn’s rage was totally justified.

Local Elisa Sansone said, “I certainly understand that frustration. People in New York are so directive that when something intervenes, it freaks them out. And look at these [production assistants]—they have a power complex. It’s intrusive.” Film and TV production was at a record high last year because of Bloomberg’s tax credit for film companies using New York as a backdrop. Hopefully someone got the action on camera, so they can make a sideproject: New Yorkers Headbutting People in Their Way: The Movie.

http://www2.timesdispatch.com/news/2010/jul/27/ed-peirce727-ar-350957/

By NEAL PEIRCE | WASHINGTON POST WRITERS GROUP

WASHINGTON Is the film industry snookering America’s taxpayers?

We’re accustomed to state governments putting up big capital for footloose auto factories, biotech firms, even airplane assembly plants.

But what are we to make of tax credits and other state-financed breaks to such big-time production companies as Disney, Time Warner, and Sony and their filmmaking subcontractors? With most state budgets now mired in deep red ink, does this make any sense?

Louisiana, which had been attracting some filmmaking for decades, decided in 2002 to ramp up modest incentives in a really serious way, passing a bundle of subsidies for film production in the state.

The strategy paid off quickly, attracting such production firms as Disney and stars such as Dustin Hoffman. Louisiana’s move did more. It triggered, as researcher William Luther reported for the Tax Foundation, “an explosion of movie production credits nationwide” as dozens of states tried by one way or another to outbidLouisiana. By 2009, 44 states, the District of Columbia, and Puerto Rico were into the game.

Michigan, reeling under cataclysmic job losses and massive budget shortfalls, has played hard to trump the field, laying out $125 million in 2008 and $223 million in 2009. Its investment, pushed by Gov. Jennifer Granholm, has snagged such big-time films as “Gran Torino” (starring Clint Eastwood) and “Up in the Air”(starring George Clooney). Eastwood has predicted Michigan “will be the new film capital of the world.”

The hope — promoted by television commercials featuring Granholm and actor Jeff Daniels — is that the rich and famous will flock to Michigan and that filmmaking will become a magic elixir for the state’s economy and image. One wonders if such towns as Lansing and Detroit have that potential. The Tax Foundation’s wry conclusion: “The probability of such a transformation actually occurring is extremely small, but the dreams ofTinseltown can die hard for citizens and statesmen.”

The incentives, as they’ve developed in copy-cat fashion across the country, typically start with exempting film-production purchases from sales taxes, or lodging taxes for crew members in hotels. They continue with such freebies as no-fee locations and waiving police traffic control costs at film sites. South Carolina even offers 20 percent cash rebates for wages paid to local actors and stunt performers.

Next come actual state grants to filmmakers for significant shares of their local expenditures. And then the biggest and potentially most serious — tax credits that remove a portion of the companies’ income taxes due the state.

Twenty-eight states now offer the tax credits, many so generous, the Tax Foundation reports, that their value often exceeds the movie company’s tax liability in a state. But they’re structured to be transferable. Brokers are able (for a 25 percent to 30 percent cut) to sell them to companies who have nothing to do with movies or entertainment. The firms can then apply the credits like coupons on their tax returns.

So is the state really gaining much? State Rep. Steve D’Amico calculated that Massachusetts was spending$89,000 a job through the tax credits. Citing the competition from other states, D’Amico told Governing magazine: “These jobs will only persist as long as we continue to offer the credit . . . .We’re renting them. But once you start handing out money, it’s really hard to step away.”

Various estimates show overall return to states embarrassingly low – 19 cents on the dollar in South Carolina, 16 cents in Massachusetts, 8 cents in Connecticut, 28 cents in Rhode Island.

The criticisms — and actual scandals in handling the subsidies in Iowa and Louisiana — have at least tapped the brakes of the subsidy train, reports Phil Mattera of Good Jobs First. Iowa and Kansas have suspended their programs while Wisconsin and Connecticut have cut back sharply.

But Louisiana — notwithstanding the revelation that its film commissioner had accepted bribes from a film producer — actually boosted its tax credit and made it permanent. Alabama, New York, North Carolina, Ohio, and Utah have recently upped their subsidies. California Gov. Arnold Schwarzenegger favors tax credits to lure back film production that’s crept away from Hollywood.

Politicians prize, predictably, photo-ops with glamorous movie or TV stars. But do film subsidies — except in established centers like Los Angeles — actually spur meaningful economic growth? Do they improve productivity, train significant new work forces, and develop new technologies — especially when a non-ending chain of public subsidies is required to keep them in state or in town?

The raw bottom line is this: Subsidy-induced film activity may have glitz and surface appeal. But nationally, it’s a washout — film production lured from one place to another is classic “robbing Peter to pay Paul.” At the end of the day the country’s no less prosperous. The net economic impact is simply to enrich the filmmakers at the expense of state taxpayers. Even a Cecil B. DeMille would blush.