Tuesday, April 19, 2011

Film incentives the right and the wrong

Seems OT but it either goes here or in the sound BLOG and since it's a VERY hot item here in the big D here is where it goes.

Michigan may do away (essentially) with it's film incentives. California got a touch but it's getting fought so?

Since I have moved to MI I'll focus on the logistics here but this really applies to all states.

There are two papers that get dragged out and held up to prove film incentives cost money.

The first is this one Film Incentives Report

It's by the "Tax Foundation" which used to be reputable but then got bought by the Heritage foundation. They fired all the economists and it now is used to churn out what ever report they want to support their causes.

The second one is State film subsidies

A report by a supposedly OK outfit named Center on Budget and Policy Priorities.

However it reads like a rewrite of the first and and uses the same erroneous arguments. So?

There are a few points that the folks supporting the incentives can't seem to get across to the general public. The anti incentives folks have set the argument and the pro folks are doing what the dems have done for years, defend against stupid accusations.

It seems to be a right wing thing to go after film incentives and the only reason I can think of is it's easy press to link them to.

Hollywood "liberals", which becomes a kind of code for all of "those people".

The arguments all come down to:

And how "we" should not be paying "them" all this money.
And all the best jobs go out of state.

The implication is that the state is giving money out of it's treasury to subsides the film industry.

The thing is EVEN IF the incentives all went to "those people" the states still make a bunch of money.

But we are talking TAX incentives.
The production pays a stack of cash in taxes to the state and when all the bookkeeping is done (a year or two down the pike) the production gets a refund.

It's not a subsidy it's a tax refund.

The "money" the state pays to the production is a slice of what the production payed to the state in the first place.

The only way this ends up costing the state anything is if you assume that all the films would have shot there anyway. Judging by the number of projects that pulled out of Michigan on the threat of the incentives getting curtailed that is an obviously wrong assumption for just about any state.

And lets get back to "those people". Yes "those Hollywood" types are going to be the headliners but they are also a drop in the bucket of film jobs.

I have news for you the majority of people in the film biz are not any of "those people". Hollywood power is smack in the middle of Orange County. One of the most conservative areas in the US. Hollywood was home to Charlton Heston and Ronald Reagan.

What is very ironic is that most of the jobs on a film are trades jobs. Carpenters, painters, electricians, metal workers, Teamsters, etc. A lot of these folks are very blue collar and pretty conservative. Many of the "flaming liberals" that get dragged out are actors. Actors are generally 1%-5% of the people working on a film. I have met more NRA members in film than ACLU members.

It's cracking me up the spell checker keeps wanting to change Charlton into Charlatan. But I digress.

For a state with incentives this could mean hundreds of jobs hired locally. And true IF you don't have local talent in the "best job" category then your not going to get many of those jobs.

But that is exactly why the state gives out "tax credits" to all kinds of businesses and even out right subsides. To grow your local talent pool and to keep businesses in your state.

And with out the incentives you don't even get the "worst jobs" (which in film generally pay pretty darn good).

Lets take a look at Michigan's budget. Now it has been claimed that Michigan "paid out" $100,000,000 in incentives. If that is true then they collected $238,095,238 in taxes, hung on to them for a year or so and then kept $138,095,238.

i.e. Michigan MADE 138,095,238, it didn't loose $100,000,000.

Look at it this way if you pay me a dollar and eventually I have to give you 42 cents back who is benefiting? I mean if the state wants to make the reverse deal with me I'm game. You can use the comments to tell me who to send the bill to.

But lets look at the bigger picture. Since we are outraged that those liberals are taking all that money to create jobs, who else might be sucking at the public teat? How much does Michigan actually pay out in "tax credits"?

Well it looks like that number is $1,351,500,000.

Here is the budget report.
Budget Report

So the state of Michigan is subsidizing companies to the tune of over one and a third Billion dollars and the only money the want to cut is one hundred mill that brings in film jobs.

I don't know where all the credits go. I'm sure none of it goes to companies that out sourced jobs to other countries. Right, and I just bought a hunk of the Brooklyn bridge.

If you think about it film production is one of the few businesses that can't out source, unless it moves the whole shebang.

OK I'm done. If someone is trying to kill incentives where you live use this info and shove it where it counts.

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