In early 2006, I was approached by some members of the Michigan Film Advisory Board asking if I would join them on the film commission to help pass tax incentives for film and digital media. in Michigan, just as New Mexico and Louisiana, the front runners at the time, had done before, among many other states.
I had practiced entertainment law for 30 years by then, primarily in the music industry, and appreciated the chance to help Michigan expand its entertainment base in an effort to bring jobs and excitement to our state as well as an opportunity to keep our young Michigan graduates creative. I was appointed to the film commission in May 2006.
After hard work from the film commission, legislators, unions and many others, and the support of Michigan notables such as Mitch Albom, Jeff Daniels and Mike Binder, a tax incentive program for Movies and Digital Media was passed by Michigan lawmakers almost unanimously and signed into law in April 2008.
The incentives not only worked, but their success was beyond expectation. Renowned filmmakers, directors, and actors including Clint Eastwood, George Clooney, Sam Raimi, and Hugh Jackman (among many others) have filmed in Michigan and told what a great experience it was. From about $2 million in film spending in Michigan in 2007, the numbers jumped to $322 million in 2010. It looked like the industry could become a billion dollar a year industry as long as the State would continue to provide incentives, albeit in reduced amounts, and promote Michigan’s excellent locations and opportunities.
But in early 2011, the state government began cutting the incentive budget. Although Ernst and Young’s “Economic & Fiscal Impacts of the Michigan Film Tax Credit” reported that for every dollar spent on film incentives, six dollars were created in state economic activity, Michigan was in the midst of financial crisis.
The positive impact of job creation, the reduction in the “brain drain” of our young creative graduates following its previous uncontrollable exodus, not to mention the spiritual and moral boost that having filmed great movies in our state had brought (which can’t be measured in dollars and cents) came to a screeching halt as the legislature continued to cut the incentives until they were eliminated in 2015.
They ended, not because they failed to bring projects to Michigan, but mainly because of the cost of incentives to Michigan and the perception that the funds spent were largely leaving the state. .
It’s time to revamp the incentives and bring more commercials and movies back to Michigan. On February 17, bicameral, bipartisan legislation was introduced in the state legislature that would be a significant investment in Michigan’s workers and economy. Criticisms of the previous incentive program were directed to convince lawmakers and the public that this legislation will be a win-win situation for Michigan.
The legislation would create a two-tier tax credit that provides incentives for film, television and streaming productions as well as advertisements produced in Michigan. The bills give preference to state-based companies that hire Michigan residents.
Participants could use the tax credits against their own Michigan tax liability, or the tax credit could be sold to an assignee who has a Michigan tax liability. This helps both Michigan businesses and the copyright applicant/holder producing projects in our state.
Additionally, the new legislation begins with modest tax credits, increasing over time. The cap increases to $2 million for each of the first three years of the program, then to $5 million for the following three years and to $10 million in the remaining four years of the program.
Michigan’s proposed legislation has the potential to elevate our state, once again, as a leader in film production and not sit idly by while film production and the strong advertising and Michigan corporate video lose to more competitive states like Illinois, Minnesota, Ohio. and Pennsylvania.
I was recently elected to the board of directors of the Michigan Film Industry Association. I am proud to work with the organization, unions and lawmakers to breathe new life into our film, digital and commercial industries in our wonderful state.
Let your lawmakers know that you support supporting Michigan’s film, digital, and business industries. Learn more and become a supporter of the Michigan Film Industry Association by visiting https://mifia.org/.