Michigan tax incentives for film production produces uncertain results, corruption, and political dispute

Michigan can use all the jobs and economic investment it can get, and state officials believe they can secure some of it by trying to turn the Great Lakes State into the Hollywood of the Midwest.

To that end, Michigan has enacted a series of tax incentives designed to lure film producers to make movies in the state. The result of the incentives? Some movies, and no small amount of discord.

The results, in terms of actual projects attracted, are hard to quantify since the incentive only went into place in April 2008. In order to qualify, the project must spend at least $50,000 in the state (but can’t pay any single employee more than $2 million), and has to meet a bunch of other requirements as far as Michigan residents working on the project.

If you qualify, you get a 40 percent refundable tax credit, across the board, on Michigan expenditures.

There have been some significant films made in Michigan, including the Tom Hanks film “Road to Perdition” and Eminem’s “Eight Mile,” but they were made before the incentives went into effect. The Michigan Film Office reports a major uptick in Michigan-based films starting in 2008, but most of them are obscure works made by local production houses. The most significant was the Clint Eastwood film “Gran Torino.”

But the film incentives have produced other things as well – namely, corruption and political dispute.

Ada resident Joseph Peters was recently charged with a felony for allegedly perpetrating a pretty sophisticated attempt to defraud the state out of $20,000, claiming he had purchased a facility for $40 million for use in a feature film. That caught the attention of the Midland-based Mackinac Center for Public Policy — a free-market think tank that is known for questioning public-sector incursions into the private marketplace.

Scholars at the Mackinac Center began asking questions about the facility Peters purchased, which is known as Hangar42. For one thing, the latest appraisal of the property had put its value at $10 million, not $40 million. For another thing, there was no evidence that any transaction had actually taken place.

Once the Mackinac Center raised its concerns, the Michigan Film Office quickly backed off its support of any project that might be produced at Hangar42, and claimed the system worked because Peters never got a dime.

Neither have the many local advertising agencies that produce commercial work in the state, and they say that’s the result of a ruling by Democratic Gov. Jennifer Granholm’s Department of Treasury that is not consistent with the spirit of the legislation.

Bill Ludwick, CEO of the Southfield-based ad agency Campbell-Ewald, also serves as chairman of the Michigan Film Coalition. He has been trying to persuade the administration to change its interpretation of the law — thus far without success.

  • Pingback: Ted Stahl’s Blog » Movies in Michigan

  • sharinlite

    Why, oh why do Uberleftys have to look like this obese, grizzly person! Aren’t the Leftys tired of the corruption their “help” laws create? Geez, you would think they would get a clue!

    And, would some live human please let WordPress know that I have only tried to post this comment once….but that is what they consider: posting too many quickly????? Huh???

  • incredabill

    Will this business stay in Michigan when it costs 40% more than it does now. I don’t think so. The business will move to the next state that offers an incentive.

  • patriot4evah

    I cannot disagree with your comment hempstead1944, and I live in Michigan. The people in MI are such fine run of the mill people too.. I pray for our future every single day… On a positive note, I love the Tim Allen pure Michigan commercials.. puts a tear in my eye every time I see them.

  • 1uncle

    Corruption in politics? Who would have thought?
    Term limits and then out of public service forever.

  • dw

    The fat guy on the cover is a liberal moron of the first order. Michigan is in the hands of morons like him, ergo disaster in Michigan.

    • theneighborhoodguy

      Hey dw: The fat guy on the cover is a social ist Canadian moron of the first and highest order. I for one, would love to see what kind of money he’s robbed from other states to finance his capitalistic ventures he so decries in his films. Fat bastard.

  • Sensoria

    It’s Bill LUDWIG.

  • independentvoter

    Well IL isn’t any better they just hide their corruption better.. beleive me CHICAGO is the biggest cesspool of politicians …AND then we sent them to WASHINGTON how do you folks like our political system???

  • hempstead1944

    What would you expect from a state that had to elect a Canadian as governor and corrupt politicians throughout the state…heck, even the Mayor of Detroit is doing time! Michigan, what a political cesspool!