NCPA - National Center for Policy Analysis


May 26, 2010

It has been two years since Michigan's film subsidy program became law, which is sufficient for it to have gotten off the ground and had some measureable impact on the state's economy, says the Mackinac Center.  

However, according to the most recent U.S. Bureau of Labor Statistics, as of September 2009, there were fewer people employed by the film industry in Michigan than before the subsidy program began: 

  • The film subsidy program was signed into law on April 7, 2008; in that month there were 5,867 jobs in Michigan's "motion picture and sound recording industries," the industrial classification that most closely fits the target industry for the program.
  • By last September, these jobs had fallen to 5,290, a 9.8 percent decline. 

While the program's impact on the overall state economy is too small to measure, its effects on taxes and the budget are significant, says Mackinac: 

  • The state has authorized $117 million in film credits, and the Michigan Department of Treasury estimates that the subsidies will cost $155 million in the upcoming fiscal year.
  • This is equivalent to 7 percent of what the entire Michigan Business Tax currently extracts from businesses. 

Film incentive supporters often point to particular jobs generated by the program's subsidies as evidence that it has been a success.   While the film incentive program has succeeded at making this very small piece of the state's economy more visible, the actual data shows that it has failed even to increase the overall number of film jobs in the state, let alone provide a source of growth for any other industry, says Mackinac. 

Source: James M. Hohman, "Michigan Film Subsidies: Two Years, $117 Million and No Film Job Growth," Mackinac Center, April 20, 2010. 

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