A news service for the people of Michigan from the Mackinac Center for Public Policy

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Taxpayers Handcuffed By Money Being Given To Beverly Hills Cop Production Company

Viacom reported $3.7 billion profit in 2013, but Michigan taxpayers will surrender $13.5 million for filming in the state

Detroit is bankrupt and required a $195 million bailout from state taxpayers, but it apparently is the perfect backdrop for the new Beverly Hills Cop movie, which will get $13.5 million in state dollars.

The sequel to the 1984 classic will feature Eddie Murphy and is being made by Paramount Pictures, which is owned by Viacom. Viacom reported a profit of $3.7 billion in 2013.

"Now that’s irony," said Eric Larson, president of the Kent County Taxpayers Alliance.

The movie production is estimated to spend $56.6 million in Michigan while filming.

Viacom CEO Philippe Dauman received $37.2 million in compensation in 2013, according to a USA Today reportViacom had revenue of $14.9 billion in 2013, which is about $1 billion more than Michigan spends on K-12 public education in state dollars.

"It's bothersome that we are giving money to really rich people when we are raising taxes on people and crying poverty," Larson said. "We have a bankrupt city that we are bailing out and we are unable to fund our roads. You are basically giving money away to people who don't need it. We have no movie industry that is going to be here any longer than the tax credits are."

Paramount had two movies that grossed more than $200 million in 2013: "Star Trek Into Darkness" ($228.7 million); and "World War Z" ($202.3 million), according to Box Office Mojo, which is a box office reporting service. 

"You are taking what would have been in the revenue coffers and moving them into the pockets of the Hollywood elite," said Scott Drenkard, an economist with the Tax Foundation, who has studied film incentives around the country.

He said trying to lure a transient business like Hollywood movies to the state should not be a high priority when spending taxpayer dollars.

"I just don't think it is a good budget priority," Drenkard said.

Even filmmaker Michael Moore questioned in 2008 why Michigan should give film subsidies to a corporation like Viacom.

"These are large, multinational corporations — Viacom, GE, Rupert Murdoch — that own these studios. Why do they need our money, from Michigan, from our taxpayers, when we're already broke here?" he said. "I mean, they play one state against the other, and so they get all this free cash when they're making billions already in profits. What's the thinking behind that?" 

Moore, however, received $841,145.27 from Michigan taxpayers for his movie attacking capitalism, according to a story in the New York Times.

(Clarification: The story previously made reference to what Michigan spends on education, but it was not clear that was in reference to the portion of money that was specific to what the state spends on K-12 education. The story has been updated.) 

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See also:

Housing Expenses Among the Perks Michigan Residents Pay For Big Hollywood

Batman and Superman vs. Taxpayers

Record Profits For Warner Bros. Doesn't Stop State From Giving Company Huge Subsidy 

Five Reasons Government Subsidies For Films Are A Bad Idea

Film Incentives: The $50 Million Sequel

Public Employee Pension Systems Raided To Pay Film Studio Bills

Big Hollywood Bailout: Taxpayers Spent Nearly $40 Million To Subsidize Disney's 'Oz'

Cost of Film Program Could Repair Over 5 million Potholes

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