News Story

Little House on the Subsidized Prairie

Melissa Gilbert says she won't start theater company unless Schauer wins

When actress Melissa Gilbert recently told a local newspaper that she wants to boost Michigan’s economy by starting a theater company near her home in Howell, the “Little House on the Prairie” star added some conditions.

Gilbert wants the state to increase the subsidies it delivers to film producers from the current $50 million annual level. She also told The Daily Press & Argus that her theater company plans are dependent on her choice for governor – Democrat Mark Schauer – winning in November.

While Gilbert lives in Michigan, she and her husband, actor Timothy Busfield, are also collecting subsidies from North Carolina to shoot an ABC-TV series in that state. Gilbert plays a role in the studio’s “Secrets & Lies” series, with her husband as director/executive producer.

The effectiveness of these subsidies at creating a sustained state film industry has been challenged by critics who say producers shop for the state offering the most lucrative deal, and then bolt once the taxpayer-funded handouts stop. One Maryland insider says the incentives are usually the first thing movie-makers ask states about, not location.

But states are finding that their cozy relationship with the movie industry can quickly go sour if the money dries up.

In 2013, the North Carolina Legislature voted to limit its film subsidies. It currently offers producers a 25 percent “refundable” tax credit worth up to $20 million per production. (“Refundable” means the state hands over a check for however much a credit exceeds a producer’s tax liability in the state.) There is no limit on the total amount granted to all studios during a given year, but starting in 2015 total credits will be capped at $10 million per year.

Hollywood responded with a threat. According to local news reports, a few days before the state’s legislators adjourned for the year, an executive of the Motion Picture Association of America trade association sent a letter to North Carolina officials telling them the limits meant the state “will no longer be considered for major future feature films.”

According to the Washington Post, in Maryland, the producer of the Netflix program “House of Cards” threatened to delay shooting episodes for a third season unless it was given $15 million, rather than the $4 million the state said was the most it could guarantee.

The program’s leading man, Kevin Spacey, argued in legislative testimony that Maryland lawmakers should increase the incentives, and they eventually gave in.

Jack Gerbes, director of the Maryland Film Office, said the first question movie producers ask is not about the location, but “What tax credits do you have?

Experts say the dubious economic benefits of film incentives are often outweighed in policymakers’ minds by the publicity generated by the stars promoting them.

“Film incentives are sexy because it allows you to play Hollywood for the day,” said Scott Drenkard, an economist at the Tax Foundation, a nonprofit think tank in Washington, D.C., that studies their impact. “Film credits have a very minimal effect. They utilize scarce resources and give them to the entertainment industry when they could be used for a competing list of priorities.”

While Gilbert’s plans for the Howell theater are on hold pending an election victory for the Democrat in Michigan’s governor race, her ABC show “Secrets & Lies” production is already shooting in North Carolina, where it is eligible to receive a 25 percent refundable state tax credit for 2014. North Carolina productions must spend a minimum of $250,000 to qualify. Gilbert plays the role of “Lisa Daly” in the series, a single mother with two children.

In Michigan, candidate Schauer has proposed expanding the current program. At one point, the state's incentive was uncapped and cost $115 million annually.

At age 10 Gilbert landed the role playing Laura Ingalls Wilder on the hit show “Little House on the Prairie,” which ran from 1974 to 1983. Ironically, Rose Wilder Lane, the real-life daughter of “Little House” author Laura Ingalls Wilder, is considered one of the founders of the modern libertarian movement in the U.S., which regards film subsidies as corporate welfare.

“There is an irony here,” said Leon Drolet, chairman of the Michigan Taxpayers Alliance. “The book ‘Little House on the Prairie’ was about rugged individualism and making it on your own without subsidies. Melissa Gilbert doesn’t seem to understand that the values that made her television career so successful she is now betraying.”

Taxpayers in Michigan have spent about $500 million on the film incentive program but the number of jobs in the film industry is lower than the year the subsidies passed.


See also:

Michigan Has Fewer Film Jobs Than it Did Prior to Incentive Program

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

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.