NCPA - National Center for Policy Analysis

MYSTERY AROUND MOVIE MONEY IS A DISMAL PICTURE

April 28, 2010

Michigan's filmmaking tax incentive program, the most generous in the nation, rebates up to 42 percent of a production company's cost.  This translates to tens of millions of dollars to movie companies in an attempt to create a larger filmmaking industry in the economically troubled state.  However, a recent analysis by the Mackinac Center for Public Policy points out that despite state giving away $117 million in subsidies over two years, there are nearly 10 percent fewer industry jobs. 

Officials in the state film office were quick to counter the Mackinac claim: 

  • They noted that the analysis failed to account for seasonal fluctuations in film industry employment, and for the fact that many industry employees are independent contractors not counted by the state Bureau of Labor Statistics.
  • However, the state office has failed to produce any hard data that would allow the public -- or state lawmakers, for that matter -- to determine how well the film subsidies are working.
  • That is because it does not have to; carefully crafted legislation exempts the film credit subsidies from even cursory disclosures of how taxpayer dollars are spent.
  • While state officials brag about apparent successes of individual film productions, they steadfastly withhold the type of information needed to fully evaluate the program.  

What's lacking is any clear reporting of the applications for the film credit, how the money was spent, and what share of Michigan tax dollars ended up in the pockets of actors, producers and directors who are leaving the state, says Mackinac. 

In the bigger picture, is it good business for tax dollars to cover 40 percent of a company's costs?  What business wouldn't prosper if fellow taxpayers agreed to cover 40 percent of its costs? 

Source: Editorial, "Mystery around movie money is a dismal picture," Livingston Daily, April 27, 2010.  

For Mackinac report:

http://www.mackinac.org/12553

 

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