Gov. Jennifer Granholm reports film industry movie tax credit to cost millions more in '10
As part of the budget process, Gov. Jennifer Granholm every year submits to the state legislature a report entitled the Appendix on Tax Credits, Deductions, and Exemptions, which details all of the various tax breaks, deductions, exemptions and credits given by the state and adds up the revenue lost due to such grants.
This year's report notes that the total amount of revenue foregone by such tax breaks will grow in 2010 to $36.4 billion. The controversial movie tax credit is expected to grow from $116 million last year to $155 million this year.
Michigan offers a 42 percent tax rebate — the most generous in the nation.
Is the lost revenue to the state paying off in jobs creation?
Richard Rattner, an entertainment attorney at the law office Williams Williams Rattner & Plunkett, P.C. in Birmingham, Michigan, says yes. He will be giving a speech at Wayne State University's Oakland Center titled "Are You Ready to be America's Next Star" on Wednesday, Feb. 17 at 5:30 p.m.
"I think it's terrific," he said. "Not only does it have to do with film, but it also allows us to do the solid second unit work in other types of work that helps this state. Added to that, you have painters and carpenters and electricians and plumbers. All of those people are employed by the movie industry. "
According to the Michigan Film Office: before 2008, Michigan averaged about five feature films per year. In 2008, there were 31; and in 2009, 35. Scores of Michigan entrepreneurs have announced they would be breaking ground on new film studios that would create new jobs for Michiganders.
But the Washington, D.C.-based Tax Foundation, a conservative political think tank, claims the film incentives are “costly and fail to live up to their promises.” In a recent report, the organization asserted that jobs created via movie production incentives are often temporary and go to workers transplanted from other states who have specialized production skills. The report claimed that it is unlikely that movie production incentives generate wealth in the long run.
