Tuesday, Dec. 7, 2010

Some questioned recently whether or not newly elected governor Rick Snyder would end a tax incentive program to filmmakers instituted two years ago.

The incentives given to those who choose to film in Michigan is the highest in the country.

That fact alone has spurred criticism and Snyder has reportedly been vocal about his opinion that the program should come to an end.

Some would say the film industry does not generate as many related jobs as say, the automobile industry. As far as the numbers go, they would be right.

However, it has been Michigan’s insistence to steady itself solely on the automobile industry that has contributed significantly to its suffering in the wake of continuing troubles from the big three automakers.

When production all but halted on the line, so did many small business jobs and industry related jobs.

And one by one, those small businesses began to close up shop.

And one by one, Michigan residents joined the unemployment line.

It is not smart for the state to anchor itself to any one industry and the passage of the tax incentive to filmmakers has notably increased production within the state. These productions have spurred economic activity within the state as a direct result.

According to an economic study conducted by Michigan State University:

• “Michigan productions spent $65.4 million dollars in 2008. Of this, $25.1 million was spent on direct wages and salary and $40.3 million was spent on Michigan goods and services. Productions directly employed 2,763 Michigan residents during the duration of filming.

• Through a multiplier effect, film productions generated 1,102 year-round equivalent jobs in 2008 with total wage and salary income of $53.8 million. In addition, film expenditures generated $28.4 million in additional statewide expenditures through the multiplier effect. In total, film production expenditures generated $93.8 million in state output in 2008.

• It is estimated that total production expenditures will grow 187 percent from 2008 to 2012 based on the experiences of Louisiana and New Mexico, who passed similar, but lower, incentives in 2002. Both states continue to experience year-over- year growth in total in-state production expenditures.

• By 2012, the study projected total direct production expenditures will climb to $187.7 million. These expenditures will likely produce 2,922 jobs with annual income of $189.5 and total state output of $335.6 million, once accounting for the multiplier effect.

• Based on generally accepted economic theory, multiplier impacts will increase over time. This occurs as infrastructure develops around this new industry and a greater proportion of the total production budgets are captured in state.

• Michigan film will likely generate tourism impacts. The study does not estimate such impacts but illustrate examples of locations in Michigan that have generated tourism and other indirect benefits from film production.”

These productions make Michigan a serious contender in the film industry. The jobs created because of those productions are goods and services that could endure over time including hospitality establishments, restaurants, retailers and wineries. The influx of visitors to the area could only increase annual and continued tourism of the state.

Michigan is home to some of the best wineries, artists and quintessential small towns in the country. But nobody will ever know it unless they see them. And there’s no better place to get a first look than on the big screen.

A local look at film’s potential impact could be to stop in Saugatuck during its annual Waterfront Film Festival. Local sites, like the town’s high school and arts center, are transformed into screening rooms and live performances held opening night along with a beer garden that promotes local breweries and wineries and restaurants. Thousands of people from the tri-state area make a regular pilgrimage to the town, filling its stores between showtimes and noticing the real estate as they’re in town.

The state should keep the film incentive program while working to improve its standing in other industries as well.

For many, the idea of a movie making a big and lasting impact on any location might seem arbitrary and even immature — as solid as a teenage trend.

But never underestimate the power of film. In a small town no one had ever heard of until around the same time as this incentive took place, the little sleepy town of Forks, Wash. became a mecca for an endless legion of fans, of all ages, of the now all-too-heard-of literary and film franchise “Twilight.”

They’re buying up merchandise and booking up hotels and saving small businesses from what would have been certain extinction.