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Commentary: Governor Should Veto Film Incentive Bills

Michigan will continue to write million-dollar checks to Hollywood movie producers under legislation passed last week, but the state will still have little to show for its generosity except an acknowledgment as the credits roll. Gov. Rick Snyder should veto this bill — not just because it’s an unfair and ineffective use of taxpayer money, but because it goes against his vision for the program to be flexible.

The Legislature voted to give subsidies not to exceed 32 percent of a film’s expenditure, down from 42 percent. But other than this cap the film office will have no control over how much they can give — their only discretion is in which productions get subsidized.

While so far only $25 million has been authorized for film subsidies this year, taxpayers should be wary, especially considering that Senate Majority Leader Randy Richardville, R-Monroe, thinks the figure should be $100 million. When it comes to "economic development" projects, legislator talk of self-limits is like food addicts going on a diet: the restrictions are quickly forgotten when they walk past a cheesecake. Once the film office runs out of money, lawmakers are likely to inject more cash into the program, because their appetite for short-term  "good news" headlines is far more potent than self-imposed limits.

That’s not speculation, but a lesson from history. When the state ran out of deals eligible for its flagship industrial incentive program in 2009, it loosened the limits. It’s easy to expand economic development when they tell themselves that it is "costless."

It is not. Indeed, one proposed amendment last week sponsored by Rep. Tom McMillin, R-Rochester Hills, would have at least made the state consider the “negative impact of tax monies take from businesses and citizens to provide this (film) incentive” when reporting on it. Lacking any assessment of the costs, these state reports only discuss the benefits. This was rejected in a voice vote. Legislators apparently do not even want to consider that film subsidies come out of taxpayers' pockets.

Gov. Rick Snyder asked for greater flexibility in film subsidies so that the Michigan Film Office can stretch its $25 million to have the largest impact. The bill now heading for his desk fails to provide that flexibility. Lacking this, and considering how little film subsidies have improved the state's economic climate, the Governor should veto this legislation.

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.