With Michigan leaders looking for ways to revive the state economy during the coronavirus pandemic, a proposal has come up that would again give tax credits for film production.
State Rep. Robert Wittenburg, a Democrat from Huntington Woods, introduced two bills in the state House that would create a two-tiered tax credit providing incentives for Michigan-produced commercials, films, television shows, and streaming productions.
This comes as 30 other states are offering film incentives, which in turn bring in jobs and provide an economic boost and related benefits from the multi-billion-dollar industry.
“This is about Michigan jobs,” said Rep. Wittenburg in a statement. “As we witness the devastation and business losses from the pandemic, we know that attracting an industry that reinvented itself amid the crisis is a smart investment in our state’s economy and its workers. This is a smart first step to rebuilding Michigan.”
Under the new legislation, preference would be given to state-based companies who hire Michigan workers. Other specifics in this legislation include:
• A base tax credit starting at 25% for in-state spending with an additional 5% awarded for the inclusion of a “filmed in Michigan” logo
• A commitment from production companies to spend at least $50,000 for a single commercial campaign or project under 20 minutes or at least $300,000 for productions over 20 minutes.
• A 30% tax credit for hiring Michigan residents and 20% for nonresidents.
• A requirement that qualified Michigan vendors provide proof of brick-and-mortar presence, have inventory and full-time employees on staff. Pass-through companies and transactions will not qualify
• Accountability requirements for independent verification of approved expenditures.
“A cross-disciplinary team of Michigan film professionals have worked tirelessly with Rep. Wittenburg for more than three years to draft this legislation,” said Brian Kelly, the co-chair of the Michigan Film Industry Association Board of Directors in a statement. “This comes at a time when our state most needs good-paying jobs and an economic boost. We can no longer remain idle as film workers leave our state to follow and industry that can provide the stimulus Michigan needs.”
Carl Osentoski, the executive director for the Huron County Economic Development Corporation, said the challenge for Michigan in attracting filming productions is the state does not have large-scale infrastructure for it. He expressed skepticism about how effective these credits will be if they are passed.
“Most people in a community are fine with granting tax credits to a manufacturing facility because it is something tangible,” Osentoski said. “With filming, there is no lasting infrastructure. People shoot then go.”
Huron County has not had good experiences with the movie business in the past few years. In 2013, the city of Caseville received a $1 million grant from the Michigan Economic Development Corporation to build a movie studio.
The state was satisfied with the documentation the city put up and local filmmaker Robert Brown’s $125,000 private investment into the facility. However, the studio would remain empty and the seven jobs promised by the venture were hoaxes.
Aside from making the documentary “Chasing Jimmy!” no films were ever made, and the city would evict Brown for not paying his taxes. The studio space would later become home to a chiropractor and a Club Fitness gym.
Osentoski said that situation with the Caseville studio is very different to the tax credit proposal going through the legislature, since that was the result of many grant programs lining up. He said that would be like comparing apples to oranges.
Michigan first started offering tax breaks to film productions in 2007 as part of another effort to spur up the economy. Other Detroit-area communities attempted to create their own studios that failed and resulted in huge bills for taxpayers, with those credits ending during Gov. Rick Snyder’s administration.
Osentoski said that while the county is not focused on bringing any filming shoots to the area, there are still opportunities for shoots to happen. He mentioned how Port Austin was featured in some Jeep advertisements and landscape shots near Ubly were used for the 2011 Hugh Jackman movie, “Real Steel.”
“The opportunity is always there,” Osentoski said. “We have a very distinctive shoreline, fields, and wind turbines. It depends on what the film or ad producers want.”
