Snyder signs bill ending incentives for film industry

LANSING -- 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 in tact -- 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: Dawn of Justice," "Red Dawn" and the "Transformers" franchise, 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 towards 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 deals.

The film office, however, 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.

Without the incentives, which cover film, TV and digital media, Michigan is expected to drop off Hollywood's radar for future projects.

"I'm sorry to say, I think that without an incentive, I don't think Michigan would be high on anyone's list," said Joseph Chianese, a film incentives expert with Entertainment Partners, a payroll and production services company with offices across the country.

Michigan might even find it hard to land productions with screenplays specifically set in Detroit or elsewhere in the state.

"Unfortunately, the reality is that the cost factor is a very big part (of location decisions). Sometimes, creative can't always rule the day," says Chianese.

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.

"Scholars across the spectrum agree that subsidizing film making is a waste of taxpayer dollars," said James Hohman, assistant director of fiscal policy at the Mackinac Center, a conservative think tank. "We applaud Michigan legislators and the governor for eliminating this program."

But the program had strong advocates who said studies didn't generally measure less tangible effects of the incentives, 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 metro Detroit film community expressed anger and sadness over the end of a program that essentially had been a political football ever since Snyder's election to office.

"I think it's very telling how this governor ran the film office right out of business and the governor of Georgia just announced they're expected to make $6 billion from their (film industry)," said Kathy Mooney of Farmington Hills-based Pound & Mooney casting.

Georgia Gov. Nathan Deal announced this week that nearly 250 film and TV projects have generated more than $6 billion in economic impact during the past 12 months.

Detroit filmmaker Rola Nashef sees the end of Michigan's film incentives as part of a broader lack of support and funding for the arts from state and national political leaders.

"They don't care about what we care about as creative people, as entrepreneurs, as artists, as people who are trying to make a living," says Nashef, award-winning director of the romantic comedy "Detroit Unleaded."

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.

Contact Paul Egan: 517-372-8660 or pegan@freepress.com. Follow him on Twitter @paulegan4.