Last year, as part of an effort to grow the economy, Michigan taxpayers shelled out $115 million in tax breaks and refunds to movie production companies. Was it worth it?
 
Let’s take a look at a few pertinent facts and figures:
 

➡ Enacted in April 2008, State House Bill 5841, granted unlimited tax breaks/subsidies of up to 42 percent of money spent in Michigan on movie production. [Source link]
 
➡ A majority of the states have created similar plans as a means to lure business and reduce unemployment. However, each film industry job created in 2009 cost Michigan about $193,000. [Source link]
 
➡ The film credits are not “incentives,” as they’ve been misnamed. They’re direct subsidies. Under the 2008 legislation, filmmakers have been reimbursed by the state for 41 cents of every $1 they spent here. [Source link]
For example, if George Clooney shoots a movie in a Michigan town and spends $1,000 on catering in a local restaurant, Michigan taxpayers pay $420 of his bill. [Source link] Aren’t we generous?
 
➡ According to the Michigan Film Office press release, “Transformers: Dark of the Moon” received $6.1 million in refundable tax credits from the state. That translates to $1.36 per Michigan resident. [Source link]
 
➡ “Real Steel”, the film adaptation of “Rock’em Sock’em Robots”, hits theaters this Friday. It’s expected that the movie will claim an $18.3 million refundable tax credit. With 4.4 million people filing an individual income tax return in Michigan, this amounts to $4.26 per taxpayer. [source link]
Feel free to request a discount at the ticket window.
 
➡ Gov. Rick Snyder attempted to slow the gravy train this past June. The $47 billion spending plan, in the 2011-2012 state budget that he signed, includes a $25 million cap; a one-time allowance for film subsidies in Michigan. This was meant to replace the previous subsidy program, which was laying out over $100 million annually. [Source link]
 
➡ After the budget was passed with the cap in place, Senate Majority Leader Randy Richardville, R-Monroe, decided further legislation was needed – in case the $25 million wasn’t enough. He subsequently drafted Senate Bill #569, which is now slowly working its way through the state congress. [Source link]
 
➡ Further shenanigans may be in the works – by GOP(!) legislators. [Source link]
 
➡ More than three months after the budget was finalized, the film subsidy details are still up in the air… [Source link]
 
➡ MichiganFilmOffice.org has a list of Michigan-made films from the last several years: Made In Michigan. And those currently in production: Coming Soon. Recognize many of them? Probably not. Looks like quite a few are just direct-to-video.
 
➡ Many films got more money from Michigan taxpayers than they earned in theaters, as “Michigan Capitol Confidential” reported in “Box Office Bombs”:

A review of the movies awarded $1 million or more in tax subsidies listed in the 2009 Michigan Film Office annual report found that six of those seven movies received more in subsidies than they made up at the box office in U.S. theaters.
 
“At least when it is left to the market, you are not forced to subsidize a film you would otherwise avoid at all cost,” said Michael LaFaive, director of the Mackinac Center’s Morey Fiscal Policy Initiative and a long-time critic of the film incentive program.

Nolan Ryan summed things up in the Detroit News back in February:

I supported the Michigan film credits, because I felt the program offered the chance to build an industry that would keep our young, creative citizens at home.
But I also understand why Gov. Rick Snyder can’t sustain them. How can he justify spending $160 million on a Hollywood giveaway while asking senior citizens, middle class families and public workers to sacrifice? Michigan can’t afford this sort of high-risk investment.

 
~~~~~~~~~
Enjoyable as it must be to be on the receiving end of taxpayer largesse, our government – be it federal or state – simply has no business picking winners and losers in a free market system. Especially given their dismal track record (federal and state). All this “playing favorites” simply encourages more unethical lobbying and cronyism. And, in the end, hampers the struggling economy even more.
 
That’s a wrap! 😎