Film Tax Credit Could End This Year

“Batman v. Superman: The Dawn of Justice” is scheduled to receive $35 million in tax credits, based on an estimated $131 million in in-state spending. (Photo via Warner Bros.)

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A Michigan House committee has approved a bill that would eliminate film incentives that helped lure films like “Gran Torino,” “Batman v. Superman: Dawn of Justice” and others to Michigan.

House Bill 4122, passed out of the House Tax Policy Committee Wednesday, would end the tax credits on Oct. 1, The Lansing News/MLive reports.

The state has doled out millions of dollars a year over the last several to subsidize in-state production costs. In 2014, the state film office paid out about $64 million for 27 projects in exchange for an estimated $245 million in in-state spending and the creation of the equivalent of 1,300 jobs.

Approved in 2008, the film incentive program has been contentious since the beginning, and lawmakers are giving the program a hard look as they work to close a $325 million budget hole created by the film credits.

When first approved, rebates were a robust 42 percent of in-state production costs, but lawmakers have since reeled in spending. The film program was extended through September 2021 by the Legislature last year under legislation that lowered the tax rebate to 25 percent from as high as 32 percent of in-state production costs.

Related:

• House Approves Extension of Film Incentives
• ‘Batman v. Superman: Dawn of Justice’ a Result of Film Incentives: Patch Poll
• Detroit Revs Batman’s Motor
• Holy Smokes, Batman, Is That a Location Downriver?
• ‘Batman v. Superman’ Sightings: Ben and Jen Crash Detroit Kid City

But opponents are skeptical about the program’s effectiveness and have pushed for its elimination. With an estimated $807 million in tax credits owed to Michigan-based companies this year, the state can’t afford the $50,000 annual credit, said state Rep. Dan Lauwers, R-Brockway, who sponsored the legislation to end the film credits this year.

“We’ve got limited resources, so let’s make good on the commitments we have, but not incur any new ones,” he told The Detroit News.

The committee voted 8-3 without debate to move the proposal to the full chamber for consideration. Two members abstained.

At a hearing last week, union members, actors and film industry supporters spoke in favor of the program, but opponents said the incentives were costly and ineffective.

The biggest project funded to date by the tax credit program is the epic “Batman v. Superman: Dawn of Justice” movie starring Ben Affleck and Henry Cavill in the title roles. The movie was on target to receive $35 million in incentives based on an anticipated $131 million in Michigan spending.

It was shot entirely at metro Detroit and East Lansing locations and at Michigan Motion Pictures Studio in Pontiac, the home base for the production. The state helped build the studio with $18 million in bonds backed by by the State of Michigan Retirement Systems, which manages the pension funds of state employees, teachers, police officers and judges.

Ending the tax credits potentially limits Michigan’s ability to lure blockbuster productions that would use the studio, potentially leaving the state to shoulder remaining debt for its construction.