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Gongwer 
8-21-23

Lights, camera – Michigan is hoping to be back in action in the film industry with a new bipartisan plan to create the Michigan Multimedia Jobs Act.

The legislation would create a tax credit to promote Michigan-produced films, television, digital streaming productions and commercials. The House bills, HB 4907 and HB 4908 , are sponsored by Rep. John Roth (R-Interlochen) and Rep. Jason Hoskins (D-Southfield), respectively. The corresponding bills in the Senate, SB 438 and SB 439 , are sponsored by Sen. Dayna Polehanki (D-Livonia).

"This is a business, an industry, that was born in the United States. Dominates still in the United States, for 100 years," Polehanki said. "This is a very serious, lucrative industry, and we're not part of it in any meaningful way."

As introduced, the legislation would create a transferable tax credit for media projects filmed in Michigan. The credit would start at 25 percent of the total amount spent and rise to 30 percent based on the inclusion of "filmed in Michigan," "Pure Michigan," "Michigan Film and Digital Media Office," and "MIFIA" logos somewhere in the project.

The legislation also would create a tax credit worth 30 percent of spending for hiring Michigan residents and 20 percent for hiring nonresidents to work on a project.

The legislation is a "complete 180" from Michigan's previous incentive program, Polehanki said, which gave filmmakers rebate for up to 42 percent of production costs.

The state's previous incentive program existed between 2008-15, but it was gutted as ineffective. In 2008, the state issued about $38 million in incentives to filmmakers. The amount peaked in 2010 at $155 million, but a Senate Fiscal Agency paper published the same year found that the $100 million spent by the state on film incentives generated slightly less than $60 million in economic impact.

"This legislation is not a rebate," Polehanki said. "We're not financing or bailing out movie studios. It's a transferable credit. … It benefits them because it's transferable so you can sell that tax credit to any Michigan company that does own taxes. It could be an automaker, brewery, small business. The only way any Hollywood production is walking out of Michigan with money is to sell a tax credit to someone who needs it."

The program also is structured in such a way so that one company can't dominate the space, Polehanki said.

Roth said he was part of the previous film credit program, and the problem was that those incentives allowed too much money to leave the state during production.

"The problem with those credits was that yeah, they brought money into the state, but they also took money out of the state," he said. "What we're trying to do with these new credits is produce the films, the documentaries, the commercials, whatever it is, in Michigan. The problem with the old credits is that we just didn't get a foothold on the production side of it."

The new credits will aim to emphasize the production side of filmmaking.

"All the states around us and southern states, like Georgia, are really heavy into it, and Michigan has nothing. I think we've got to incentivize it a little to get it going," Roth said. "Once we get it going, maybe we can have a small industry here."

More than 40 states offer some sort of film credit program. Roth said the point isn't necessarily to draw in the existing industry, but to give Michigan students who are interested in the industry a place to start at home.

"Why are we teaching this at Grand Valley and Michigan State if we have no jobs to offer afterwards?" he said. "My youngest daughter will be a senior at Grand Valley this fall, and she's in film production. I know that she's already looking at what state she can go to, to have her career. … We're taking younger folks out of Michigan into other states when I think we could promote film production again."

Before, Michigan was promoting itself as a beautiful filming location. Although that remains true, it's not the emphasis of the new proposal, Roth said.

"Now, we have to actually produce jobs in the state with the film business," he said. "I'm not trying to bring Hollywood into Michigan. We're never going to get Hollywood into Michigan. We're going to produce our own stuff."

Roth said he wanted to see the Big Three automakers film more of their commercials within the state. Right now, he said Michigan wasn't competitive enough for that to happen.

"They go to other states to film their commercials," he said. "They've got the mountains in the background, the ocean, when we have some beautiful territory in Michigan where they could be filming these commercials around, so we need to start bringing some of that home."

Roth said Pure Michigan is the only entity that has promoted filming in Michigan, but the program is receiving less funding in the budget this year, and so he thought it would be a good idea to incentivize film production in Michigan in other ways.

He said there's already been some pushback about not wanting Hollywood in Michigan and the failure of the previous tax credits to attract the film industry.

"There's opposition already forming … saying we don't need film credits in Michigan, and we don't want Hollywood here. I guess I would agree somewhat with that. We want our own Michigan production," he said.

The Mackinac Center for Public Policy is opposing the bills, calling it a "race to the bottom," in an article published in Michigan Capitol Confidential, a news source produced by the Mackinac Center for Public Policy.

Roth said he had talked to them about the differences between this legislation and the previous Michigan film tax credits.

"They're still not necessarily onboard, but I think they're starting to get a little more perspective on what it is," he said. "We have to compete."

Economists are often skeptical of film industry incentives because the industry can be hit or miss.

"Economists never like (film incentives). They never do well in the economic impact studies," said Ellen Harpel, founder of Smart Incentives, last week during the National Conference of State Legislatures summit. "But boy, are they popular."

Roth agreed that the industry isn't necessarily an easy economic win.

"It is hit and miss, to some point, but filming our own commercials in the state, that shouldn't be hit or miss, that should be every year," he said. "I've heard them say that the jobs are often transient and short-term, well, that's because we have nothing to offer. … We've got to have opportunity."

The new film credits will aim to keep money in Michigan, Roth said.

"We need to promote the jobs that go into this and can stay in Michigan," Roth said. "Our young people are leaving our state. … We want our youth to stay at home. We've got to give them the opportunity."

The legislation isn't likely to come up when the Legislature returns in September, but Roth said he was hopeful it could come up before the end of the year or in early 2024.

"We've got a little bit of tweaking and work to do yet. I don't think we're there, but I think we're close," he said.

Polehanki said she was hopeful that the Senate would take the bills up in the fall.

"We're beautiful here, but a lot of places are beautiful," she said. "They're not going to come without an incentive. It's just not how it is. It's not how this business works. Unfortunately, they're going to make money and save money where they can."

– By Elena Durnbaugh

Author: Arpan Lobo, Detroit Free Press

Stakeholders and lawmakers backing bills to revive a state-backed incentives program to attract media projects say Michigan has been a virtual nonfactor in the film and commercial industry since the previous iteration of the program was gutted in 2015. 

READ THE ENTIRE STORY at Freep.com

Furthermore, supporters of bills introduced in July to create an incentive program for film and video production in Michigan say bringing media projects back to Michigan can help spur job creation in the state. The proposal is not without critics, however, as some in Michigan view the plan as a poor use of the state’s potential tax revenue.

Lawmakers have dubbed the matching legislation in the state House and Senate to create a revamped film incentives program in Michigan the Multimedia Jobs Act. The word “Multimedia” is a key distinction, backers say, as the proposed incentive program would apply to such efforts as commercial filming and professional training videos, in addition to traditional film and television projects.

As introduced, the bills: 

• Create a transferable tax credit for media projects filmed in Michigan, starting at 25% of total spending and rising to 30% based on the inclusion of “filmed in Michigan,” “Pure Michigan,” “Michigan Film & Digital Media Office” and “MIFIA” logos somewhere in the project. As a transferable tax credit, a company who receives the credit could later sell the credit to another entity with a Michigan tax liability should the company who originally received the credit not have any tax liability of its own. 
• Create tax credits worth 30% of spending for hiring Michigan residents, and 20% for hiring nonresidents to work on a project. 
• Outline eligibility requirements for companies to receive the tax credit. To be eligible, companies would have to keep track of the individuals they hire from the state to work on the project, maintain receipts of what spending they do in Michigan and which vendors they work with, as well as other economic data. 
• Set minimum spending levels for projects — commercial and advertising projects, as well as films 20 minutes and shorter would have to spend at least $50,000 in Michigan to be eligible. Film projects longer than 20 minutes would have to spend at least $300,000.
• Define which media projects wouldn’t be eligible: Projects with “obscene matter,” news and sports broadcasts, political advertisements, radio programs, weather programs, fundraisers, reality television and more wouldn’t be able to receive the credit. 
• Would establish a 10-year “sunset” for the incentives program, meaning the program would be shuttered 10 years after its implementation. Supporters say this sunset clause would allow lawmakers to fully gauge if the incentive program had an adequate economic impact. 
• Set caps on how much in tax credits the state could distribute under the program: For projects shorter than 20 minutes, a maximum of $25 million in credits could be approved in the first three years of the program; followed by a maximum of $50 million in credits in the next three years; and a maximum $75 million in credits for the final four years. For longer projects, the maximum credit allocations would be $100 million, $150 million and $200 million for the three time periods. Any money left over could be carried over to the next fiscal year. 

READ THE REST OF THE STORY at Freep.com

The credits would be distributed based on the money spent by a company filming in Michigan rather than an all or nothing approach, said Alexander Page, legislative chair of the Michigan Film Industry Association (MIFIA). The group is a key backer of the legislation and had input on the crafting of the bills, Page added. 

At least 35 states, plus Washington D.C., Puerto Rico and the Virgin Islands, currently have some form of incentives for the film industry, according to the National Conference of State Legislatures. MIFIA places the figure even higher at 41 states. Both totals are down from a peak of 45 states in 2010, with the economic downturn around that period being cited as a reason for some states rolling programs back, per the NCSL.   

When crafting the legislation, Page said, MIFIA looked at incentive programs around the country to discern what would work best if implemented in Michigan.  

“We talked to other states to see what worked and what didn’t,” he said. “We worked with the Motion Picture Association, with (accountants) to see what worked and what didn’t. We also wanted to work with economists and the state to find out what was the best way of getting the return on investment to be more Michigan-centric, that’s the reason why it’s multimedia jobs.” 

READ THE REST OF THE STORY at Freep.com

It’s because of the Multi-Media Jobs Act, and its sponsors sit on both sides of the isle.

LANSING, Mich. (WILX) - There’s an effort to lure the film industry back to Michigan. Newly introduced legislation at the state capitol would provide tax incentives, with similar goals to those offered in Michigan from 2008 to 2015.

Michigan’s old film incentives brought projects like Batman V Superman, Real Steel, Transformers, and a Miley Cyrus music video among many others. However, critics of the old tax cuts called them “Hollywood Hand-outs.”

Now, that old law has been re-worked and re-introduced, to specifically benefit Michiganders. In the past, film productions brought thousands of jobs to Michigan, and that could be coming back in the near future.

Supporters of the new bill say they’re feeling really good about getting the spotlight back on the Mitten. Their bill is called the MultiMedia Jobs Act, and its sponsors sit on both sides of the aisle.

While the old law drew criticism, a writer for the new bill says it’s nothing like what came before it.

“We have one of the most beautiful landscapes in the entire country. We have lakes and rivers, we have urban and we have rural, we have all four seasons. We have probably the best physical location you can shoot at,” said Alexander Page, who helped draft the MultiMedia Jobs Act through the Michigan Film Industry Association.

Hollywood and Michigan may seem worlds apart, but Michigan was one of the hottest destinations for filming blockbusters for a short period of time.

“You know you could go to the bakery in Ann Arbor, and Drew Barrymore would be there getting scones when she did her directorial debut here. The state of Michigan allowed Michael Bay to shut down sections of our highway, and do huge stunts,” said Curtis Hall, a Senior Producer with Ahptic Productions, “We did a music video with Miley Cyrus, and it was a very large production.”

Read the rest of the story and watch the video report at WILX.com.

LANSING, Mich. (CBS DETROIT) - Michigan's film industry could get a boost if bipartisan bills in the Michigan House and Senate are approved.

Lawmakers introduced the Michigan Multimedia Jobs Act this week which aims to incentivize TV shows, films and commercials made in Michigan.

"This new package of bills is really meant to produce jobs in the state of Michigan and keep them here," said State Rep. John Roth who sponsored one of the bills in the House.

Lawmakers tell CBS News Detroit that these bills are meant to improve upon the old film incentives.

"The problem with the old bills is that after they shot the movies, they left the state of Michigan and took money with them to produce them in other places," Roth said. "So long-term job production is what we're looking at. We want to make sure that that's very clear. We're looking at producing jobs, not promoting the state of Michigan in film. So that's going to change a little bit."

Read the rest of the story and view the video at CBS Detroit.

State lawmakers have reintroduced a tax incentive program for the film and multimedia industry to help lure production back to Michigan, hoping to overcome opposition stemming from a previous program.

A film crew at Black Pigeon Studios in Walker outside of Grand Rapids. Credit: Tyler Darland

Introduced this week, the Multimedia Jobs Act would provide incentives for Michigan-produced multimedia projects such as film, television and streaming in hopes of retaining Michigan talent and stimulating economic activity.

The proposed incentives would operate as a transferable tax credit instead of a rebate, as was the case under film incentives enacted during former Gov. Jennifer Granholm’s administration. Tax credits would stay in Michigan and benefit Michigan companies, according to proponents of the bills.

“One of the things we wanted to do (with this new legislation) is prioritize Michigan,” said Alexander Page, chairperson of the Michigan Film Industry Association (MiFIA)’s Legislative Action Committee and member of its board of directors. “We don’t feel like the state should be in the business of issuing checks. We wanted to make sure that this was changed, and so this is structured as a tax credit.”

The new two-bill package was introduced in the House by Rep. John Roth, R-Interlochen, and Rep. Jason Hoskins, D-Southfield, as House Bills 4907-4908. Sen. Dayna Polehanki, D-Livonia, and Jeremy Moss, D-Southfield, introduced identical bills in the Senate as Senate Bills 438-439.

The Multimedia Jobs Act would give preference to Michigan-based companies that hire Michigan residents, with a 30% tax credit for hiring Michigan residents. The legislation also specifies a base tax credit starting at 25% for in-state spending with an additional 5% awarded for the inclusion of “filmed in Michigan,” “Pure Michigan,” “Michigan Film & Digital Media Office,” and the MiFIA logo.

Read the rest of this story on Crain's Grand Rapids Business

David Haddad, chair of the Michigan Film Industry Association, joined CBS News Detroit Friday to discuss the proposed Multimedia Jobs Act that would bring film, television, commercials, and music work back to Michigan.

View the story at CBS News Detroit.

Governor Whitmer Announces Support for Revival of Michigan's Film Industry

When Governor Gretchen Whitmer takes the oath of office for her second term in January, it will be the first time in 40 years Michigan will have a Democratic majority in the legislature and a Democratic governor.

“It’s very exciting,” said Whitmer. “The legislature is still the legislature, so things don’t always move quickly but I look forward to working with both Democrats and Republicans to solve problems.

“We will be able to make the kinds of investments and policies that will truly benefit Michiganders.”

IMAGE: Susan Smiley - The Macomb Daily

Whitmer would also like to see a revival of  Michigan’s film industry. In 2008, then governor Jennifer Granholm adopted a filmmaker incentive program. That program, which was terminated by Gov. Rick Snyder in 2015, stimulated business in the state and generated more than $300 million of film production spending at its peak.

“I was always proud to support the incentives as a legislator,” said Whitmer. “Michigan is such a beautiful state and I think showcasing it is a way that we can tell the Pure Michigan story and show what we have to offer.”

Even businesses not directly connected to filmmaking such as restaurants, catering services, hotels, and transportation providers experienced an economic bump from film crews working in the state, according to Whitmer.

“People benefitted from having the film industry here who were not even on the film set,” she said.

Read the Rest of the Story in The Macomb Daily

NOTE: This story appeared in Northern Express.

LIGHTS, CAMERA, ACTION!

By Craig Manning

What state is at the epicenter of American moviemaking?

If you answered “California,” you might be surprised. While California’s status as the home of Hollywood has made it the de facto filmmaking capital of the world for generations, the Golden State has been outpaced in recent years—or at least given a run for its money—by states like Georgia, New Mexico, and Louisiana. Those three states took the top three slots on a 2020 ranking of the “top locations for motion picture and TV production” from Business Facilities, a magazine that helps businesses with site selection. California and New York settled for fourth and fifth, respectively.

How, you might ask, did three seemingly random states leapfrog their way to the top of the film production food chain? Ask anyone in the entertainment industry and you’ll probably hear the same answer: robust film incentives.

Once upon a time, Michigan had a robust film incentive program of its own. Adopted by the administration of then-governor Jennifer Granholm as a means of helping the state recover from the late-2000s financial crisis, Michigan’s film incentive program took off in 2008 and, at its peak, generated nearly $300 million of film production spending in the state. In 2015, though, Granholm’s successor, Rick Snyder, signed a bill that killed the program, effectively crossing Michigan off Hollywood’s list of potential production destinations.

Now, legislators in the State Senate and House of Representatives are pushing to bring film incentives back to the Mitten State. Will their efforts put Michigan back in Hollywood’s good graces? Or will politics keep the state from getting its close-up?

Transformers, and Avengers, and George Clooney, Oh My! A Brief History of Michigan Film Incentives

According to the Detroit Free Press, just two major films were produced in Michigan in 2007, bringing approximately $2 million in film production spending to the state.

A year later, those figures shot off the charts.

In 2008, Governor Granholm approved an incentive program that Traverse City filmmaker Bill Latka says was “the largest film incentive in the country” at the time. “It was basically Granholm’s attempt to get some new activity going here in Michigan, because nobody was making cars [during the financial crisis]. So they created a 42 percent cashback incentive, where if you spent $1 million [on a film production], you’d get $420,000 back. And it instantly brought you-would-not-believe-how-much work to Michigan.”

Per the Free Press, the Michigan Film Office approved 71 applications in 2008 alone, generating $125 million of in-state film production spending and creating 2,763 Michigan jobs. Noteworthy film projects included Clint Eastwood’s Detroit-set Gran Torino and Drew Barrymore’s directorial debut, Whip It.

The ensuing years built upon 2008’s success. In 2010, Michigan had 66 approved film projects underway, generating $293.4 million in film production spending and creating 5,310 film production jobs. From the locales of Ann Arbor, which appeared in both the horror sequel Scream 4 and the George Clooney-directed political thriller The Ides of March, to the Detroit-heavy shoots of action films like Transformers: Dark of the Moon and Real Steel, Michiganders had lots of opportunities to spot their state on the big screen.

After 2010, though, the film incentive saw a major turning point in the form of incoming governor Rick Snyder. Where the film incentive program up to that point had been uncapped—meaning there was no limit on the amount of incentives Michigan could pay out in any given year—the Synder administration placed a $25 million annual cap on the program.

The change had a swift impact. Carry-over projects from previous years—such as the gargantuan $200 million Disney blockbuster Oz the Great and Powerful, directed by Michigan native Sam Raimi—meant there was still a significant amount of film production happening in 2011, including $201.9 million in spending. But the number of new project approvals dropped from 66 to 24, and Michigan lost out on some big Hollywood projects as a result—most notably, Marvel’s The Avengers.

It was a series of ups and downs for Michigan film incentives after that. 2012 was a slow year, with just 13 new projects approved and only $57.8 million in production expenditure. Then, in 2013, the program got a boost when Senate Majority Leader Randy Richardville successfully advocated to have the incentive cap doubled from $25 million to $50 million—a move that helped bring major films like Batman v Superman: Dawn of Justice, Transformers: Age of Extinction, and Need for Speed to Michigan.

In 2015, Snyder signed a bill that officially ended film incentives in Michigan. That legislation did set aside $25 million to sunset the incentive program during the 2016 fiscal year. But instead of drawing new projects to the state, the money was earmarked for either paying out incentives that had already been approved in previous years or dealing with the disastrous collapse of the state-subsidized Raleigh Michigan Studios.

Show Me The Money: An $80 Million Debacle

Based in Pontiac, inside the old General Motors Centerpoint truck complex, Raleigh Michigan Studios was, for a time, Michigan’s largest film production studio. Oz the Great and Powerful, for instance, was a Raleigh production. Viewed as a way to lead Michigan’s bid for relevancy in the film industry, the studio was able to clear its hefty $80 million in startup costs thanks to subsidies from state and local governments. The city of Pontiac waived property taxes for the Raleigh site and issued $18 million in municipal bonds, which the Granholm administration backed by using the state retirement system as collateral.

Despite a promising start with Oz, Raleigh Michigan Studios got hit hard by Snyder’s rollback of the film incentive program in 2011 and defaulted on a $630,000 bond payment the following year. The state was left to cover that payment—and other future defaults—out of its pension fund. Ultimately, Michigan cleared the debt in 2016, using $19 million of the final round of film incentive funding to settle the bill.

By 2017, there were no more film incentives to be had in Michigan. Film production activity in the state dried up and has not recovered since. In 2018, the land and building that had made up Raleigh Michigan Studios was sold off to a defense contractor.

The dream, it seemed, was dead.

There’s No Place Like Home: The Debate Over Bringing Film Incentives Back to Michigan

The cynical read on the Raleigh Michigan Studios fiasco is as a cautionary tale: a reminder of what happens when you chase a famously fickle industry with taxpayer dollars. But proponents of film incentives argue that there’s more to the story and that Michigan’s dalliance with film could have gotten a happier ending—and still might.

Much of the pushback against Michigan’s film incentive program in the early 2010s was grounded in a Senate Fiscal Agency report from 2010, which found that the incentives were generating just 60 cents of private sector activity for every dollar they cost the taxpayers. But pro-incentive advocates argued that the study was too narrow in its assessment and that it overlooked long-tail benefits, like the potential for the program to attract more young people to Michigan.

That debate is back on the docket in Michigan this year, thanks to a quartet of bills—Senate Bills 0862 and 0863 and House Bills 5724 and 5725—currently pending in the state legislature. The bills would give film production companies a base tax credit of 25 percent for in-state spending, plus another 5 percent for projects that include a “filmed in Michigan” logo in their credits. Production companies could also earn bigger tax breaks for hiring Michigan workers.

Latka sits on the board for the Michigan Film Industry Association (MIFIA), which has been advocating for the bills since they were introduced earlier this year. In his view, these bills propose a better incentive than the one Michigan let die in 2015. Instead of a cashback model, the new program would take a tax rebate approach. That distinction, combined with a smaller incentive and some additional motivation for producers to hire Michigan residents, would—in Latka’s opinion—create a better balance between the interests of the film production companies and the interests of Michigan itself.

“One of the criticisms of the last incentive was that some people said, ‘Oh, it’s just a Hollywood giveaway,’” Latka explains. “George Clooney would come to town and make a million dollars. And then the state would basically refund 42 percent of his salary back to the producers for hiring George Clooney. Well, this time, it’s not a cash giveaway. It’s a refundable tax rebate. So, say there’s a $1 million project that comes in. That would be a $250,000 tax credit that the producers of the movie will either use themselves, if they have a personal tax debt in Michigan—which is unlikely; or they would sell it to a Michigan business that does have a tax liability. So, a company like Cone Drive, or Hagerty, or Steelcase, or Ford, or General Motors, they could buy those credits at a discount, and then they get a discount on their Michigan state taxes. The money does not go out of state, basically, which was one of the big criticisms of the last incentive.”

Though he was living in California when the first incentives went into effect, Latka moved back to Michigan—his home state—as it suddenly became a film production haven. For several years, “there were all sorts of people that were working in the movie business here,” he says. “I would say three-quarters of them left when they closed out the incentive. Half of my friends moved to Atlanta, because Georgia has a big incentive program and they’ve stuck with it. These days, they do $8 billion a year in production in Georgia. That’s a substantial amount of money, and we could get a chunk of that back.”

State Senator Wayne Schmidt of Traverse City, one of the legislators leading the charge for the film incentives, says the legislation is unlikely to gain traction in the current legislative session. With the issue back on the minds of lawmakers, though, he’s hopeful that film incentives will eventually come back to Michigan.

“I don't think it’s going to get a lot of attention this year; we just wanted to make sure we raised the issue,” Schmidt says. “I know film credits and incentives in the past were kind of loosey-goosey and not always what people were looking for. We did an introduction of some bills that were smaller and more tightly focused to kind of see where the reactions were. Film is an area that we see a lot of young people getting into, and we certainly want to make Michigan an attractive place for young people—not just to stay here, but to move here. So, redoing those [incentives], refocusing them, and taking some best practices from other states and seeing if we can apply them here in Michigan, that’s the goal.”

Supporters of new legislation that would bring a film tax credit back to Michigan are hoping the measure can make the state a destination for filmmakers once again.

This story appeared on WOOD-TV 8 in advance of a Film Incentive Town Hall scheduled for May 11 at Lowing Studios in Grand Rapids, MI.