


You would have thought that Michigan lawmakers would have learned a thing or two from their predecessors’ efforts to respond to the Great Recession, which began early in the state and hit it hard.
You would have been mistaken, at least with respect to corporate subsidies.
A bipartisan group of state legislators has introduced bills seeking to incentivize movies, television shows, and commercials to film in Michigan, with a tax credit that goes as high as 30 percent of production costs spent in the state. The credits would be tradable, allowing studios without a significant tax burden in the state to sell them for a discount to other businesses.
But when Michigan tried a similar scheme a decade ago, it didn’t work. In the first years of the program, a Senate Fiscal Agency analysis found, the state spent more on the tax credit per job created than the then-average wage in Michigan. Across the length of the program, each new job cost more than six figures, and many were “transient and temporary,” according to the Mackinac Center for Public Policy.
That plan, repealed under Republican governor Rick Snyder in 2015, cost taxpayers around $500 million. The current proposal would authorize up to $2 billion in credits.
Proponents argue that the new program is structured differently than the old one. The chairman of the Michigan Film Industry Association’s Legislative Action Committee has pointed out that this program offers a tax credit rather than a rebate, so that the state wouldn’t “be in the business of issuing checks.” That line is clearly intended to win over small-government conservatives, but from a budgeting perspective, it doesn’t mean much. A dollar paid out in a rebate is no worse for the state budget than a dollar erased from a company’s tax obligation.
They say those who don’t know history are doomed to repeat it. Perhaps someone can screen a movie about the history of corporate subsidies for Lansing’s benefit.