Snyder signs bill ending incentives for film industry

Paul Egan, Detroit Free Press

Gov. Rick Snyder signed legislation Friday that ends Michigan’s film incentive program to grow the state’s movie industry, but keeps the Michigan Film Office, at least for now.

House Bill 4122, now Public Act 117 of 2015, means an incentive program that helped attract major Hollywood stars and top directors to Michigan to make movies such as “Batman v. Superman” and “Red Dawn,” will soon fade to black.

“It’s important that we support creativity and innovation in our state, and we’ll continue to have a Michigan Film Office to assist moviemakers and production staff,” Snyder said in a news release. “Michigan has much to offer the movie industry, including top-notch talent and beautiful backdrops that will continue to draw filmmakers to Michigan even without taxpayer-funded incentives.”

The law includes $25 million for the incentives for the 2016 fiscal year that begins this Oct. 1. But $19 million of that will go toward paying off the state’s investment from pension funds in a struggling Pontiac film studio, and none of it can be used to extend new tax credit deals.

The film office can continue to operate to satisfy any existing contracts, which may last for another three years.

After that, the remaining duties of the film office, created in 1979, could be absorbed into the Michigan Economic Development Corp.

A 2010 report from the Senate Fiscal Agency said each dollar spent on what were then refundable film tax credits generated only about 60 cents worth of private sector activity and each job directly created by the program cost taxpayers as much as $186,519 to create.

But the program had strong advocates who said such studies didn’t measure less tangible effects of the credits, such as making Michigan a more desirable place for young people to put down roots. A notable champion was former Senate Majority Leader Randy Richardville, R-Monroe, who left the Legislature at the end of 2014 due to term limits.

The measure to kill the program, sponsored by Rep. Dan Lauwers, R-Brockway, easily passed both chambers in June, with voting mostly along party lines in the GOP-controlled Legislature.

The film incentives started in 2007 under former Gov. Jennifer Granholm and the program peaked during her last year in office in 2010, when $115 million in incentives were awarded. Snyder changed the program from refundable credits to cash incentives, which he attempted to cap at $25 million a year, though that amount was in some cases doubled during budget negotiations.

Free Press staff writer Julie Hinds contributed.

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