This is part one of two.
Gov. Rick Snyder on Wednesday signed into law Senate bill 569, now Public Act 291, which lays out the ground rules for Michigan’s $25 million film incentive program.
The new direct grant program isn't as lucrative for producers as the old 42 percent across-the-board tax credits were. But it at least puts the Michigan Film Office back in business. It will begin accepting new applications for incentives on January 9.
The bill is not without its detractors however.
Michael LaFaive, director of the Morey Fiscal Policy Initiative at The Mackinac Center for Public Policy, a free market think tank, said: “Sometimes it seems like Republicans only favor limited government when they are not in charge of it. When will they accept that robbing Peter to pay Paul creates more job announcements than real jobs? That this failed 'Big Hollywood' program remains a creature of Michigan law is deeply disappointing.”
The Center added: “For a variety of reasons, government subsidies targeted at particular industries have a terrible track record when it comes to boosting a state's economy. This conclusion is supported by economic theory, history and empirical research.”
The Center then restated the obvious: “Tea Party activists were unhappy, to say the least.”
Snyder seems to agree, at least in principle. He prefers lower business taxes overall to giving tax breaks to specific companies or industries.“The government is not qualified to pick winners and losers” he said. “That’s the job of the marketplace.”
At the same time, Snyder the businessman knows that to grow, Michigan must place winning bets on its future. Random tax credits don’t make sense. But targeted ones, that are consistent with a long-term growth strategy for the Michigan brand, do.
A bill authorizing the continuation of tax credits for businesses building new advanced battery manufacturing plants – signed alongside the film incentive legislation – is a case in point.
Needless to say, the Mackinac Center, widely respected for its scholarship, remains staunchly opposed to film incentives…and, not that it should care, staunchly un-cool.
Part two examines the “multiplier effect”...economic modeling that attempts to gauge the full financial impact of Michigan’s film incentives.
Comments