There’s quite a difference between what Michigan Governor Rick Snyder and his predecessor regard as constituting economic growth. What is clear, though, is that Michigan, like many states, is facing a daunting budget shortfall, estimated to be some $1.4 billion.
The new Republican governor’s self-described approach is one of “shared sacrifice” as reflected in a 2011-’12 fiscal year budget proposal which would cut spending for public schools, universities and local governments while ending many personal tax breaks. Gov. Snyder told the Associated Press that his state budget is also “getting rid of all the special-interest kind of items. This is approaching it as a total solution.”
One of those “special-interest kind of items” that would be impacted by Snyder’s budget is Michigan’s groundbreaking tax credits program, which covers as much as 42 percent of local expenses for an eligible project. Currently there is no cap on the filming incentives package.
Snyder’s budget–which, if passed by the Republican legislature, would take effect on Oct. 1–places a cap on the amount of filming tax credits for the year at $25 million. In its current and proposed form, the tax credits would continue to apply to theatrical features and TV shows, not to commercials.
The cap would greatly reduce the appeal of the program to prospective filmmakers. But whether the incentives cutback is penny-wise and pound-foolish is subject to great debate.
Snyder’s predecessor, former Gov. Jennifer Granholm, a Democrat, said last year that the filming tax credits initiative has proven to be successful. “Michigan’s film incentive program has made our state one of the top three in the nation for the production of all types of media,” said Granholm during her weekly radio address on April 2, 2010. “An entire new industry is emerging in Michigan, one that’ll help keep our talented young people here.”
In its 2009 annual report, the Michigan Film Office related that filming expenditures in the state increased from $125 million in 2008 to an estimated $223.6 million in ’09. That figure was a mere $2 million in ’07, prior to the incentives program being enacted.
In its latest semi-annual project report released last month, the Michigan Film Office related that in 2010, 119 production companies applied for film and digital media incentives, with 69 projects approved. Forty-eight incentivized projects wrapped in ’10. From July 1-December 31, 2010, 26 approved projects represented a total estimated Michigan investment of some $168.6 million as compared to some $65.7 million in credits requested. Additionally, many of the projects approved in late ’10 do not start production until this year.
However, another report–prepared by economist David Zin for the Senate Fiscal Agency–concluded that the price of the Michigan film incentives program exceeds the economic activity generated.
Indeed Zin’s study does not look at lensing incentives through rose-colored glasses. Part of his report’s conclusion read:
“The analysis of film incentives is a complex process. Many assumptions and interactions must be accounted for and studies will differ in both the manner and degree to which these issues are addressed. Failure to address several of the issues that arise can cause results to differ by factors of more than 10, or even produce results that differ in the direction of their impact. Studies that have produced lower impacts for film incentives have generally addressed more of the issues and/or used more realistic assumptions, but such a claim cannot be made universally about the studies….
“Regardless of what factors are accounted for in the analysis, film incentives have generally exhibited a positive private sector impact in the form of creating employment and generating income. The magnitude of impacts depends upon a wide variety of assumptions. In Michigan, however, the sector is very small relative to the size of the economy, accounting for less than 0.1 percent of gross domestic product by state and about 0.14 percent of wage and salary employment. If the MSU [Michigan State University Center for Economic Analysis] report’s employment projections are correct, the sector will increase in size by approximately 50 percent over the next five years. However, this growth would represent only roughly 2,900 jobs, about 8.1 percent of the jobs lost between May and June 2008. The information sector, of which media production is a subsector, lost 3,100 jobs in 2008–even with the film incentives. If the incentives have the impact forecasted in the MSU study, it will be insufficient to bring the information sector back to its 2007 level. Any probable impact from the film incentives is likely to have a negligible impact on economic activity in Michigan, particularly when the economy is viewed as a whole.
“As is true for most incentives,” continued the Zin report, “the film incentives represent lost revenue and do not generate sufficient private sector activity to offset their costs completely. As with other types of incentives and credits, whether the relationship of costs to benefits is acceptable is a decision for individual policy-makers.”
Still there are tangible benefits that are difficult to attach a specific dollar amount to, such as the impact on tourism with state locations and attractions gaining exposure in film and on TV. Plus there’s the infrastructure being created by increased filming business. For example, Raleigh Studios is slated to soon open a stage facility and production complex in Michigan.
Utah Leaders and Locals Rally To Keep Sundance Film Festival In The State
With the 2025 Sundance Film Festival underway, Utah leaders, locals and longtime attendees are making a final push — one that could include paying millions of dollars — to keep the world-renowned film festival as its directors consider uprooting.
Thousands of festivalgoers affixed bright yellow stickers to their winter coats that read "Keep Sundance in Utah" in a last-ditch effort to convince festival leadership and state officials to keep it in Park City, its home of 41 years.
Gov. Spencer Cox said previously that Utah would not throw as much money at the festival as other states hoping to lure it away. Now his office is urging the Legislature to carve out $3 million for Sundance in the state budget, weeks before the independent film festival is expected to pick a home for the next decade.
It could retain a small presence in picturesque Park City and center itself in nearby Salt Lake City, or move to another finalist — Cincinnati, Ohio, or Boulder, Colorado — beginning in 2027.
"Sundance is Utah, and Utah is Sundance. You can't really separate those two," Cox said. "This is your home, and we desperately hope it will be your home forever."
Last year's festival generated about $132 million for the state of Utah, according to Sundance's 2024 economic impact report.
Festival Director Eugene Hernandez told reporters last week that they had not made a final decision. An announcement is expected this year by early spring.
Colorado is trying to further sweeten its offer. The state is considering legislation giving up to $34 million in tax incentives to film festivals like Sundance through 2036 — on top of the $1.5 million in funds already approved to lure the Utah festival to its neighboring... Read More