THE BLOG

Michigan's Floundering Film Industry Can Recover

11/18/2011 01:47 pm ET | Updated Jan 18, 2012

In early 2006 I was approached by some members of the Michigan Film Advisory Commission, inquiring if I would be willing to join them on the film commission to assist in getting film and digital media tax incentives passed in Michigan just as New Mexico and Louisiana, the front runners at the time, had done previously, among numerous other states. I had been practicing entertainment law for 30 years at that point, primarily in the music industry, and welcomed the chance to help Michigan expand its entertainment base in an effort to bring jobs and some excitement to our state as well as an opportunity to keep our young creative graduates in Michigan. Governor Granholm appointed me to the commission in May 2006 and the next time I saw her she reminded me, "We want the best program in the country."

Following a lot of hard work by the film commission, legislators, unions and others, as well as support from Michigan notables such as Mitch Albom, Jeff Daniels and Mike Binder, the best film and digital media tax incentive program in the country was almost unanimously passed by the Michigan legislators, and signed into law by Governor Granholm, effective April 2008. The plan was to build an industry, keep the incentives in place as passed for five years, and then review the numbers to see if they needed tweaking to keep the films coming in, but, at the same time, reduce the out-of-pocket cost to the state if needed.

The incentives didn't just work, but their success was beyond expectations. Filmmakers, directors, actors of considerable note including Clint Eastwood, George Clooney, Sam Raimi and Hugh Jackman (among many others) have filmed in Michigan and talked about what a great experience it was. From approximately $2 million in filmmaking expenditures in Michigan in 2007, the numbers leaped to $322 million by 2010. It looked as if the industry could become a billion-dollar-a-year industry as long as the state would continue to provide incentives, and promote itself, as well as the great locations and opportunities it holds. A new, state-of-the-art world class film studio, Raleigh Michigan Studios, recently opened in a former General Motors building in Pontiac, Michigan, bringing attention to Southeast Michigan's attempt to move from being a one industry manufacturing focused area. The shift from the location having focused on automobiles to its new use as an entertainment industry leader with seven sound stages was a significant statement.

But, alas, a new governor, Rick Snyder, not believing in tax incentives for any industry, was elected, took office in January 2011 and by February 2011 had slashed the budget for films to a maximum state expenditure of $25 million, not enough, by most estimates, to continue bringing feature films to Michigan except on a very limited basis. The February 17, 2011 LA Times reacted and included the headline: "On Location: Michigan to Hollywood -- 'Get Off My Lawn'" paraphrasing Clint Eastwood's line from Gran Torino, one of the first major films shot in Michigan after the incentives went into effect.

Were the 2008 film tax incentives too costly for a cash-strapped state just coming out of one of the auto industry's worst slumps which caused two automotive bankruptcies? Not in my opinion or in the opinion of many others in the state. Ernst and Young's Economic & Fiscal Impacts of the Michigan Film Tax Credit reported that for every dollar spent on the film incentives six dollars were created in economic activity in the State. The positive impact of jobs, reducing the "brain drain" of our young creative graduates from its previous out-of-control exodus, not to mention the spiritual and morale boost that having major motion pictures filmed in our state has reaped (which can't be measured in dollars and cents) came to a grinding halt when Governor Snyder effectively pulled the rug out from under this bourgeoning industry.

Now pending in the Michigan legislature is a heartfelt, grant based program (rather than the current tax credit program) which has passed the State Senate and is currently in the House Commerce Committee in an attempt to bring the film industry back to Michigan. The chief proponent of Senate Bill 0569, Senate Majority Leader Randy Richardville is the chief proponent of the new legislation and has said he'd like to see as much as $100 million per year allocated to this new film and digital media incentive program. This amount is nearly as much as what was spent by the State in 2010 and, although the bill doesn't have the same benefits and rates of incentives as its predecessor, and is a bill that would require ongoing appropriations, it appears to be a far better choice than the governor's $25 million cap and should help restore confidence that the film and digital media industries are welcome in Michigan and we are, indeed, open for business.

The House Commerce Committee will be hearing testimony on November 29, 2011 and, hopefully, move forward to pass a bill that both the Senate and the House approve and that the Governor signs into law.

Notify your legislators that you are in favor of keeping the film, digital media and commercial industries in Michigan.