The Michigan legislature lured the film industry to this peninsula last year with the incentive of refundable tax credits of 40 percent of production costs. And it was a point of pride for at least one area Republican legislator who provided the leadership of seeing it approved. The incentive had the immediate, anticipated effect, with 37 movies shot in Michigan last year resulting in an injection of approximately $120 million to the state economy, including $50 million to $60 million in payroll to state residents.
State Sen. Mark Jansen, R-Gaines Township, is picking up where Sen. Nancy Cassis, R-Novi, left off last year, introducing legislation to cap the total film industry credits, a proposal that died in 2008. But Jansen is using the magic word to champion such change; that word is “surcharge” — as it relates to the horrendous and reviled Michigan Business Tax. Jansen sponsored the legislation to speed up the phase-out of the 22 percent MBT surcharge, which passed the Senate last month.
The continuing issue with that necessary reduction is how it would be replaced in a state with far less revenue as job seekers speed to cross the state line. Jansen now proposes that elimination of the surcharge could be made up — in part — by capping the film industry incentives.
Let us recall, however, that the MBT was born in a midnight, year-end session and its champions were Republicans. Even if the surcharge is eliminated, it does not excuse the fact that the MBT is just bad tax policy and needs to be rewritten wholly. Apparently, that’s not the kind of leadership the legislature can provide.
The surcharge phase-out then half-heartedly attempts to correct part of the MBT wrong by disincentivizing another new industry — another wrong.
For all of the reasons that film industry incentives were a good idea last year, they remain an even better idea this year: They worked. Even Cassis can attest to that, with plans under way for a new film studio in her home district in Pontiac offering thousands of new jobs.
Michigan cannot afford the kind of marketing and public relations the film industry provides just by being in this state. New animation studios by a known industry leader also have been announced for the Detroit area. These are new economy jobs; these are jobs that draw the young(er) and talented members of the work force to a state bleeding such losses.
The draw of tax incentives are well known to every economic development professional, whether those were Renaissance Zone tax abatements or those offered for energy, bioscience or agri-science, as have recently been heralded in West Michigan.
The logic of any “incentive” has been in the offer for a specific number of years, not by caps of arbitrary amounts set by those who have no clue regarding industry standards.
Jansen and his fellows would do well to use their noggins and their time to do the right thing and rewrite what is now the MBT.
Two wrongs won’t make anything right.