Do 'Stealthy' Michigan Senators Want to Spend $100 Million on Film Subsidies?
Facebook post insists: Michigan senator 'wishes to keep this process quiet and very stealth!'
Update: Since this story was posted on June 14, the facebook post referenced in the story has been removed from the “Save the Michigan Film Tax Credit” facebook page. To read the original, click here.
In the wake of Gov. Rick Snyder’s sweeping overhaul of the Michigan film tax credit program, there appears to be a “stealth” effort to revive the program — an effort that involves at least one Republican senator.
Trouble is, the effort is not as stealth as perhaps the legislator would like it to be, as it was posted on the social media network Facebook.
Until Snyder’s recently signed business tax overhaul (which goes into effect next Jan.1), filmmakers have enjoyed unlimited tax breaks/subsidies of up to 42 percent of money spent in Michigan on movie production. Last year alone, the state granted tax breaks or refunds totaling $115 million. In contrast, under next year's budget, a much more modest $25 million has been authorized for film subsidies, which was appropriated on an unusual “one-time basis only.”
Film industry supporters immediately took issue — and action — after the governor’s February budget announcement. As with many organizations, causes and special interests, a Facebook page was created called “Save the Michigan Film Tax Credit.” The idea, according to the page’s information, is “simple”:
"A very simple idea. Help us persuade the new governor-elect that the tax credits are worth keeping by telling us honestly about any work or job that you have gotten from a film production that came here. Thank you."
One contributor to this page is Ken Droz, former communications director for the Michigan Film Office. A comment by the outspoken proponent of the previous film subsidy program appeared on this Facebook page on June 8 that mentions this “stealth” effort starting with the 37-1 Senate passage of Senate Bill 383.
A House Fiscal Agency analysis states that “The bill would amend the Michigan Business Tax Act (MCL 208.1455 et al.) to provide for the awarding of smaller film credits.” Basically, this means that the 42 percent refundable tax credit is no longer a guarantee for qualifying movie productions. Instead, the Michigan Film Office could give less than 42 percent in tax credits or refunds if it wants to. For instance, the film office could grant a Michael Moore documentary more of a refund than a Mel Gibson film, or vice versa.
It’s not so much SB 383 that is a big deal. It merely allows the Michigan Film Office to carve up the $25 million film subsidy pie a little differently.
It’s what Droz hints at in his Facebook post that should be of much bigger concern as it relates to the bill’s primary sponsor, Sen. Mike Kowall, R-White Lake:
“As public as it is, Kowall wishes to keep this process quiet and very stealth! As mentioned a new bill should be introduced, SOON, supplementing 383, to continue after Jan. 1, 2012 - with a film fund of approx. $100 million.”
Droz’ comment goes on to say he doesn’t know how the anticipated bill would work, but feels the momentum is positive for film industry supporters:
“But bottom line — Kowall, and Sen. Maj. Leader Richardville are definite supporters of a viable film program, and working many political gears to get it thru the House, and a Snyder signature.”
Kowall has not responded to a request for comment on the Facebook post.
Further exploration found another page featuring “Responses from Legislators,” on which Facebook users posted three letters purportedly from legislators in response to constituents’ concerns about the governor’s plans for the film subsidy program.
From Sen. Tory Rocca (R-Sterling Heights):
“I believe at the very least, we should allow the film credit to remain in place for a few more years, so that we will have a better basis for evaluating their effect on our state's economy. I am hopeful that they will result in more long term investments in Michigan from film makers in the form of permanent movie studios.”
From Sen. Dave Hildenbrand (R-Lowell):
“As for the film credits, please know that I supported the film credit package in the House of Representatives. I believe this credit has created economic activity and excitement throughout our State.”
Rep. Ken Goike (R-Ray Township) was less committal:
“Michigan should have a film industry, but it should also have every other possible industry that we can attract by offering companies an even playing field on which they can succeed in our state….we will have to look at existing policies, including the refundable film tax credits, to make sure they are a sustainable model for adding permanent jobs in our state. Admittedly this may not be an easy task and the outcome may disappoint some, but I believe this is necessary if we are going to put our state back on the path to sustained and permanent growth.”
If nothing else, the “Save the Michigan Film Tax Credit” Facebook page is perhaps an unintended resource for government accountability; now the public knows of an alleged wish by an elected official to keep his activity “very stealth.” This is something to keep in mind given the fact the bill is now in the hands of the Michigan House Tax Policy Committee, which as Droz points out, is “chaired by Judd Gilbert, plus friends Vicki Barnett, Rudy Hobbs & others.”
Michigan Capitol Confidential is the news source produced by the Mackinac Center for Public Policy. Michigan Capitol Confidential reports with a free-market news perspective.