News Story

Michigan Senate Votes to Remove Sunset Provision Ending Hollywood Subsidies

Bill also removes cap on high-paid actors; now moves to the House

The Michigan Senate voted 32-4 to extend the state's film subsidy program beyond its 2017 sunset and eliminate a cap on what taxpayers will pay for out-of-state workers.

Senate Bill 1103 is sponsored and championed by Senate Majority Leader Randy Richardville, R-Monroe, a long-time proponent of the program which has lost luster and clout in the Legislature in recent years. Sen. Richardville unsuccessfully tried to double the annual budget to $100 million in the past. The senator said about the $100 million goal in 2011, “We will be fighting and I intend to win.”

The just-passed bill actually reduces the top 32 percent subsidy to 25 percent. But it also revises the subsidy calculation formula by lifting a cap how much out-of-state actor salaries can be included. The amount the state will pay to cover expenses represented by highly paid workers (actors, producers, directors) will no longer be capped at $540,000.

According to the Senate Fiscal Agency analysis:

The bill would alter the definition of "qualified personnel expenditure" by including per diem and lodging expenses and eliminating the $2.0 million limit for any single employee. Similarly, the bill would eliminate any restrictions limiting the reimbursement for payments and compensation paid to producers.

The state Legislature could end the program at any time by not funding it. Elected officials in opposition said the money used for the film subsidies could better be spent on roads.

“These funds would be better spent investing in our state's infrastructure, repairing our roads and bridges,” said Sen. John Moolenaar, R-Midland, who was one of the four Senators to vote against the bill. The others were Sen. Joe Hune, R-Hamburg Township, Sen. Patrick Colbeck, R-Canton, and Sen. Dave Robertson, R-Grand Blanc Township.

“I feel that if we put that money into roads right now, rather than films, we get much more bang for our buck,” said Rep. Bob Genetski, R-Saugatuck, who said he will vote against the bill when it reaches the House.

The original film subsidy bill passed 108-0 in the State House and 37-1 in the State Senate in 2008. But since then, Michigan taxpayers have appropriated nearly $500 million and have seen no uptick in the number of film jobs.

The State House proposed a budget in 2013 that would have ended the film subsidy, but eventually a compromise was reached with the Senate and Gov. Rick Snyder. Senate Bill 1103 heads now to the House where leadership and members have been on record opposing the program.

Sen. Richardville’s office did not respond to an email seeking comment. His spokeswoman Amber McCann did not return a phone message seeking comment.

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.