Commentary
1:06 pm
Thu May 19, 2011

Film Tax Credits

It seems all but certain now that the film tax credit is dead. Governor Rick Snyder came to office saying he had a dim view of it, and that he was against the state trying to pick winners and losers.

That view does make some sense. My guess is that most of the major recent new industries, from camera phones to  Google,  wouldn’t have been immediately appreciated by governments.

However, the film industry is something else. Michigan offered the industry huge tax credits if they would come make movies in our state, and come they did, making everything from TV series like the just-canceled Detroit 1-8-7 to big-budget pictures like Clint Eastwood’s fabulous Gran Torino. But once the industry started growing, fierce debates erupted as to whether it was worth it.

I have read economic impact studies that made a persuasive case that the film industry was adding at least sixty million a year to the state‘s economy. I’ve read other studies that indicate that it was a money loser.  I am not enough of an economist to know which is right. I can tell you this: It did generate excitement, as few things have here in a long time. Last night I talked to a man  who has no doubt that the tax credit was a good thing.

Steve Humphreys owns a unique business called Vogue Vintage, which specializes in nostalgia items from the last century. You want to make over your living room for a Mad Man party with Kennedy administration furniture, he’s your man.

He’s got stuff that you might classify as junk, but you might also find, as I did, a superb dining room set for a fraction of its worth. Humphreys didn’t go looking for the film industry; they found him.

Hollywood set designers descended on his Pleasant Ridge showroom. “It was just great,” he told me. “Local folks haggle over price. The film guys never did. They said Midwestern prices were so much lower than New York or LA. Lower-budget pictures might rent stuff, but that was great too. I’d get $200 to let them borrow something I couldn’t sell anyway.” he told me. Humphreys was making ten thousand a year from films, without really trying. He was hiring more staff and looking at a new warehouse with office space. Now, those dreams are gone.

Governor Snyder now indicates he  wants to replace the tax credit with an incentive program in which film makers would compete for a pot of $25 million a year. Humphreys said that was too little, too late. “They’re gone,” he shrugged. “And it was just taking off.” The state Film Office Advisory Council sent lawmakers a letter with similar sentiments yesterday.

They said the governor’s plan would eliminate Michigan as a serious competitor in the film industry, but added: “We believe a competitive, predictable and fiscally stable program will not only generate significant economic impact, it will help fulfill several of the governor’s stated goals: Create jobs, reverse the brain drain build new infrastructure and promote tourism.”

There seems to be ample evidence the film industry already has been doing precisely that. I wonder if the governor might want to ask himself if this might just be the one exception to his normal rule.