Michigan Chamber CEO Blasts Film Subsidies as a 'Boondoggle'

The House Commerce Committee has approved legislation to extend Michigan’s film incentive subsidy program indefinitely. Senate Bill 1103 was advanced Wednesday on a 10-7 vote as four Republican committee members joined six Democrats in support of the measure. The bill now goes to the full House, where a vote is expected soon.

The Republicans who voted yes were: committee chair Rep. Frank Foster, R-Pellston; Rep. Wayne Schmidt, R-Traverse City; Rep. Dale Zorn, R-Ida; and Rep. Gail Haines, R- Waterford. Rep. Foster lost his GOP primary re-election bid in August and Rep. Haines is term limited, so neither will be back next year. Reps. Schmidt and Zorn have both been re-elected to the Senate.

Michigan Chamber of Commerce CEO Rich Studley blasted film subsidies during withering testimony in which he called the program a “boondoggle,” and argued that extending it would indicate a Legislature with upside down priorities. The leader of the influential state business group pointedly observed that the millions of taxpayer dollars spent on film subsidies would be better employed fixing roads.

“If the Michigan film subsidies were a movie it would be on the list of the 10 worst ever seen, right along with 'Ishtar,'" Studley said. “The issue before you today is all about priorities. Supporting this legislation would put highly compensated movie stars and highly compensated directors, who don’t even live in Michigan, ahead of Michigan’s motorists.”

Studley read from a Michigan Economic Development Corp. memo dated Feb. 18, 2014.

“A total of $26,551,106 in film credits were claimed from the Department of Treasury in 2013,” he said. “As of Dec. 31, 2013, a total of $225,539,660 in film tax credits have been paid out by the state with $94,148,139 in potential film credits that remain eligible to be claimed under the tax credit program.”

“What is the return on this?” Studley asked, before turning again to the MEDC memo. “For the calendar year 2013 here are the permanent jobs created: for the movie 'Man v. Wild,' zero permanent jobs; for the movie 'Fish Zoos Zoos Wham Whams,' zero jobs; for the movie 'Chasing Jimmy,' zero jobs; for 'Detention of the Dead,' zero; for 'Actor,' zero; for 'AKA Jimmy Picard,' zero; for 'Beside Still Waters,' zero; for 'Blue Goji Boxing,' zero; for 'Keystone Studio’s 100th Anniversary Collection,' zero; for 'Low Winter Sun,' zero.”

Studley asked the panel to at least amend the bill by retaining the current Sept. 30, 2017, “sunset” for the program. As currently drafted, the legislation eliminates the sunset altogether, allowing film subsidies to continue on a permanent basis. He said that gives plenty of time for the Legislature to decide whether or not to keep the film subsidies going beyond the current Sept. 30, 2017, expiration.

However, Rep. Vicki Barnett, D-Farmington Hills, suggested the sunset is unnecessary because the Legislature can always cut off funding for the subsidies in the annual budget.

A similar argument was advanced by Bridget Sobek, policy adviser for the Senate Majority Office, who testified in favor of SB 1103 on behalf of Senate Majority Leader Randy Richardville, R-Monroe, who introduced the bill.

“This bill does not deal with appropriations for the film credits,” Sobek said.

Left unsaid was that under the appropriations process currently in use, money for programs like film subsidies appear as a single line item among hundreds of others in multi-billion dollar omnibus budget bills. Typically, once approved by House-Senate conference committees these omnibus budget bills are subject to a single up-or-down vote.

Andrew Richner, a former Republican legislator now working as a lobbyist for Clark Hill PLC, testified in support of the bill. Rep. Rick Outman, R-Six Lakes, asked Richner about recouping the taxpayers’ investment in the film subsidies. Then Rep. Henry Yanez, D-Sterling Heights, told Richner that he had received emails from constituents who oppose the film subsidies.

“Aren’t these (actors and directors, etc.) just paying taxes on the money we’ve paid them?” Rep. Yanez asked.

Richner said Senate Bill 1103 would change the film subsidy program so that it would be more likely to pay off for Michigan taxpayers.

“What we want is to fix these so that people like Ben Affleck (actor, director, screenwriter, and producer) would be making (tax) payments back to the state on . . . into the future for things like the (movie) royalties going forward,” Richner said. “So if they had a big hit the state would stand to collect a lot of money for a long time.”

“We’ve heard a lot these types of promises about this program in the past,” he said.

Rep. Barnett asked Studley why the Michigan Chamber was taking a stand against the film incentives after not opposing other taxpayer subsidies.

“Why didn’t you (the Chamber) come out against the money we just gave for a hockey arena, or in the past for the Palace of Auburn Hills, Ford Field and Comerica Park?” she asked.

“There is a difference between those and these film credits,” Studley said. “Most of those were public–private projects in which a significant amount of private dollars were invested. But this program (the film subsidies) is a giveaway.”

Studley added that another difference involved timing, pointing again to the need to spend more on road repairs.

“These lawmakers like to say they are conservatives,” Studley said outside the committee meeting. “But if they can’t pull the plug on something like this, I don’t know how they can make that claim.”

Senate Bill 1103 was passed by the Senate 32-4 on Oct. 22. On Wednesday, Carrie Jones, former director of the Michigan Film Office, now with The Studio Center, a stage and production facility in Farmington Hills, asked the panel to consider adding subsidies to produce commercials, which are not included in the current bill.

“Only 10 to 15 percent of commercials made for the Big Three auto companies are currently made in this state,” Jones said.

The committee did not add commercials, but an amendment authored by Rep. Foster was approved that would adjust tax payments by film subsidy recipients. Rep. Stacey Oakes, D-Saginaw, was not present at the hearing. Rep. Ben Glardon, R-Owosso, abstained on the Senate Bill 1103 vote.

The problem is, how do you get the other states who do the same to stop? Movies used to be filmed here without subsidies and tax break because it was cheaper but the subsidies and breaks are how states are competing for the business.

I agree, I was more poking at the hypocrisy of Hollywood liberals who cry about tax breaks for the rich while supporting tax cuts for their own industry,

“Don’t tax you, don’t tax me, tax that guy behind the tree.”

Yeah I feel the same way.

Michael Moore is the piece of crap who screams about how unfair the subsidies are, then turns around and takes a million dollar tax credit for himself.

7 posted on 11/21/2014 5:18:25 PM PST by Jack Hydrazine (Pubbies = national collectivists; Dems = international collectivists; We need a second party!)

8 posted on 11/21/2014 5:30:46 PM PST by bigbob (The best way to get a bad law repealed is to enforce it strictly. Abraham Lincoln)

Hey everybody! How about we get this FReepathon done before Thanksgiving to let Jim and all of the FReepers have time to enjoy Thanksgiving and the rest of the Holiday Season without seeing a Freepathon for the remainder of the quarter.

Every donation counts no matter how big or small. If you can donate $5, $10, $20 or $25 or more, please help keep freedom alive!!
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Woo hoo!! And now less than $17.5k to go!! We can do this. Thank you all very much!!

9 posted on 11/21/2014 5:36:10 PM PST by RedMDer (May we always be happy and may our enemies always know it. - Sarah Palin, 10-18-2010)

True though, the chamber should also oppose those stadiums and arenas.

Iam sure he and his C.E.O. of Agricorp. Would much rather use all that money to provide E.B.T. cards, medicaid, housing to the newly minted legal residents!

The Chamber of Commies should shut the %$&# up and stand on line when wanting to screw the taxpayers for personal financial gain

Disclaimer: I despise spending money for the production of movies just a bad as Amnesty for criminal invaders!

Someone has to pay for those big houses and privates jets to everywhere. You know “the taxpayer”.

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