Detroit Films

When the Michigan State legislature approved the 40+ percent tax incentive, awarding anyone willing and able to haul their production equipment, A-list stars and veteren crews to the midwest, few probably ever dreamed how quickly and in what quantity they would actually arrive.

For those of us in the greater Detroit area, news of star sightings, daily block closings and casting calls have almost become a daily occurance. To say that the legislation has worked would be a vast understatement. Small business owners throughout the area have benefited: from companies directly related to the film and video production industry, all the way down to barber shops and restaurants.

Yet, with all this bustle, there is growing concern that Lansing is disgruntled with “these movie producers” who are “not paying taxes in Michigan, but are still getting money.”

Senate Bill 404, a bipartisan proposal that would top the film tax credit off at $50 million and reduce the available refunds by 7 percent is currently on the table for discussion. The refundable film tax credits would be cut to 35 percent from their current rate of 42 percent. The bill was introduced on March 25 and is sponsored by:

State Senator Nancy Cassis, R-Novi
State Senator Jud Gilbert, R-Algonac
State Senator Tom George, R-Kalamazoo
State Senator Mickey Switalski, R-Roseville

(an aside here: if one of the above Senators represents your district, please contact them and tell them what you think of Bill 404)

It’s clear what these politicians are thinking: with a deepening budget deficit, funding cuts to school, police and fire, and other woes too numerous to count, should we be “giving away money” to these Hollywood moguls?

Here’s the issue. It’s not if you cut the incentives; it’s when to cut them. It’s a matter of timing.

Those discussing the idea of cutting the incentives now should take a page out of the drug dealer’s guide to effective marketing: Get them hooked with the free stuff, then start to charge for product.

Case in point: as it stands, the lion’s share of work on productions shot here in Michigan has been done by out-of-state residents. This only makes sense. Michigan hasn’t yet had the ability to cultivate the talent or infrastructure large productions demand. Would you hand over a $100 million film to inexperienced amateurs?

That’s not to say there aren’t working professionals in the state; there are definitely capable, talented people here. But even then, there’s the issue of scale. Take for instance the production catering business. Most catering companies in Michigan are capable of handling a 2-3 day shoot and roughly an 80 person cast and crew. Now, take the typical big-budget Hollywood production and those mumbers multiply 10 fold. Factor in the number of productions versus the number of companies that cater productions and one begins to see that the state simply can’t handle the size and volume. Enter: out-of-state companies and workers.

So, cutting incentives now wouldn’t mean a thing to Hollywood. They’ll just follow the money and go to the next state that ponies up the fattest checks. We haven’t hooked them yet.

Now, go 5-7 years out. The state has already began building the infrastructure (we’ve all heard about the huge studios that are either being planned or are underway), and it’s beginning to churn out the talent (Specs Howard just opened it’s new film campus). We’ll stop losing the hundreds if not thousands of young people to New York or California if there’s a reason to stay here.

The infrastructure is in place. The talent and crew are experienced and uhh . . .talented. There’s plenty of hot dogs ready for a three month shoot. Hollywood has officially moved to Michigan. When all signs point to that . . . then pull back on the incentives. It won’t matter as much by then, because they’ve invested too much and the cost of employing locals versus flying people out from across the country will offset it. In other words: they’ll be hooked.

Bottom line: politicians need to have a long term vision of the tax incentive; not a short-sighted “it’s not creating jobs now!” view of the legislation.

So, get on the phone. Start writing letters. Let your State Senators and Representives know what you think of Bill 404. Maybe it’s a good idea. Just not right now.

Here’s an example of the letter you could write to get you started:

Find your State of Michigan Representative and let them know what you think of Senate Bill 404

Find your State of Michigan Senator and let them know what you think of Senate Bill 404