Thanks for reading and visiting the site. Clearly, you work in the industry in Michigan…Detriot by the look of it. Outside of the work they do on the film incentives in Michigan, I am not familiar with Mackinac’s other work or their politics. I have found, however, that their reporting on the Michigan film incentive has been very well researched and reported. Take this story for example, Mackinac merely helped uncover the alleged fraud. And if Michigan residents were getting defrauded out of millions because of film incentive abuse on the studio, it seems like Mackinac did the right thing. Am I wrong? As for their other coverage of the state film incentives, I think its important to bear in mind that they are not inventing information on the cost and efficacy of the incentive. Rather, they often point to the economic impact reports prepared by the state itself and state institutions.

I understand your hostility, as I assume you benefit greatly from Michigan’s incentive program and do not want it to come to an end. I get that, I really do. And while I have no doubt the incentive really helps you and the industry there out and you understandably love it, it doesn’t mean the incentive is bad for the state as a whole. As more and more time has passed and these incentives been studied over and over from experts left and right, the overwhelming consensus is that film incentives, as they exist now (too large) are very bad public policies that cost the state much more than they recoup from new production spending. How much does it cost? In Massachusetts, for example, the cost of each new film job created to the taxpayer is $89,000. Assuming a similar number in Michigan, it seems like the state could pay for two to three teachers, fire fighters or police than they do for just one film job. The question is, are we ok with laying off teachers while at the same time paying for film incentives?

That said, since you questioned the credibility and research abilities of Mackinac, can you point to some specifics for support? If you can help me understand why they lack credibility, then I will discount them as a reliable source…but I need some evidence.

I hope to hear back from you. Outside of the Mackinac issue, I would love to get some of your insight on being a filmmaker in Michigan. It sounds like things have really been exciting there.

Take care,

Adrian

Do you work in the industry? To be fair, I think these commercials might now qualify for the new CA film incentive. On second thought, I don’t think it covers commercials. I wont argue about the business tax rate there, as its not something I know much about. I will say, however, that the new film incentive program is an effort by the state to reduce taxes on productions and encourage new shoots to stay or come to the state. Are you in favor of these subsidies and tax credits?

The sad part is that it is now more expensive to do business in CA. I live here and love my state, but increasing taxes and restrictions are pushing business out of CA when it should be flourishing.

Fight the increased taxes and re-routing of CA monies from necessary services to the general fund to pay for the oversized CA government.

Make CA great again!
The government should stop

Great to hear back from you. I just downloaded the UMass study and will digest it, but take my time before commenting on it. At 64 pages, its no quick read. And I was happy to get the download from your office’s site, which, as you noticed, I am a big fan of. Don’t be modest. I have spent hours on such state sites and your was hands down the most engaging. Maybe someone has stepped up their game to match, but I have not seen it yet.

I do want to address your last message. Regarding the wage payments to residents vs. non-residents, touche. You have a valid point for the most part. The main part of the wage data I quoted from the report came from the key findings, which did not delve into the specifics of who, from out of state, was getting a large portion of such wages. So while I should have gone deeper into the report, the key finding I quoted was, arguably, itself the “out of context” information. That said, it’s not really fair to say I was citing it out of context. So I decided to look at your point and include the more detailed analysis on page 12 of the report. It provides:

Of the estimated $332.5 million paid to non-residents, $177.3 million was accounted for by wages and salaries of 36 individual actors, directors and producers who were paid more than $1 million per production, an estimated $26 to $30 million was for other “above-the-line” wages and salaries for non-residents who were paid less than $1
million per production (mainly non-resident actors), and the remaining $125.2 million to $129.2 million was for wages paid to “below-the-line” non-resident employees who worked in Massachusetts on specific productions.

So you are correct that a handful of actors got more than half ($177 million of $332) of the wages paid to non-residents, but that still leaves roughly $160 million for out of state “below the line” (a phrase I do hate) workers (and that includes the $30 million for non-headline or super-star actors). I would still point out that the now undistorted amount of $160 million is still close to being twice the amount of wages paid to residents, at roughly $97 million.

I know that your aim, over time, is to foster a home-grown pool of workers that can take over the jobs now performed by many non-residents. And that’s great. But how long will this realistically take? It seem like it would be better, from a policy perspective, if the $177 million spent on just 36 out of state actors/directors etc. had instead been used to establish training programs at community colleges. Perhaps even offering grants to students to enroll in such programs. Maybe follow New Mexico’s example and offer incentives to productions who hire in-state residents to give them valuable training. This way the money directly benefits Massachusetts residents, local community or state colleges and fosters education.

Moving forward, many states have reformed their incentives to prevent such high-wage talent from reaping such a huge proportion of the tax benefit. Given what that money could be used for to also foster the industry, I don’t see how not correcting this can be defended as sound policy. I hope you agree, as I know you did not draft the legislation–so I do not blame you–you work with what they pass.

You might want to propose something similar to what some parishes in Louisiana are doing: offering assistance to California-based industry workers moving incentives and assistance with purchasing homes in Louisiana to relocate skilled labor and, in effect, make them in-state residents.

As for your point on Tom Cruise and taxes…his one check giving more to the state than you over your life. Valid point. Smart. But this also seems to come accross as an attempt to sell the idea that incentive programs are big revenue producers for the state…I don’t know what the UMass findings were, but the DOR report found your program was making about 18 cents on the dollar….and why knock that? It’s still great return. It’s a return, period. As I said, I think these incentives can be justified even if revenue neutral or maybe even modest revenue drains if the result is significant job creation.

This brings me to your comment in response to the article in Variety. You claim the reporters were “mistaken” about Massachusetts. Unless I am reading an corrected version, the article only mentions the DOR report with the following:

The Massachusetts Dept. of Revenue commissioned a study, which resulted in a sternly worded report that took issue with a widely quoted Ernst & Young survey putting New York’s return on investment at $1.90 for every $1 spent. While it doesn’t specifically analyze the New York program, it points out that another Ernst & Young study claims New Mexico’s tax credit generates 94¢ per $1 spent even while a study by New Mexico State U,’s Arrowhead Center sets the figure closer to 14¢ on the dollar.

What exactly are they mistaken on when it comes to Massachusetts? They don’t seem to say anything about your program and only mention the DOR report. Even then, they only mention the DOR report to point out how critical it was of other state’s economic impact claims, which are grossly out of proportion with many other findings, including their own for Massachusetts—but that’s not in the article. Basically, the DOR report resulted in a plug mention for Massachusetts and a way of knocking down your competition.

What I fear, and please tell me if I am wrong, is that you made your comment because you perhaps took issue with the DOR’s critical evaluation of New Mexico’s incredible claims of return…which now are very questionable, if not fictional. I only say this because you did claim, in the Variety comment that Massachusetts was essentially getting the same kind of return reported in the New Mexico and New York reports, which were scrutinized by the DOR. In short, do you agree or disagree with the DOR’s findings concerning New Mexico and New York? It seems like you agree with the claims from those states, because they mirror your own optimistic investment return claims.

I think, given the findings of the DOR report regarding the fantastic claims by New Mexico & New York–which have now been criticized by many reports and studies in addition to the DOR–that policy makers should disregard the notion that they will see the kind of economic benefit and revenue producing claims made by NM & NY as total myth. Until their projections were studied and seemingly discredited, its easy to understand why we have witnessed the race to the bottom catastrophe I was happy to see you and I agree was not the ideal, to say the least. And if the race to the bottom is going to end, which it has been shockingly slow to do, or even begin to recede, then isn’t it important to refrain from making such fantastic claims of economic benefit to the point of selling the notion film incentives are even revenue producers? If the incentives made money for the state, why would your Governor want to limit how much it spends?

What I am trying to say is you can still sell these incentives, but the pitch needs to be totally overhauled.

In the long run, only a handful of states can realistically expect to become regional centers for film, television & digital media production in the US. A shake-out will inevitably occur. Its happening right now. In Massachusetts, as last week’s UMASS study points out, 25% has proved to be a good deal for taxpayers and filmmakers alike. But ultimately, our success will depend not just upon the stability of our credit, but also the diversity of our locations, the depth of our crew base, the dependability of our infrastructure, and the overall desirability of our state as a place in which to live and work. –Nick

PS: The percentage of wages paid to non-residents will always be distorted by literally a handful of big star salaries. And you certainly must realize that by citing that statistic out-of-context, you’re the one who’s actually spinning–in the negative! The same report you cited also found that two-thirds of all new jobs created in Massachusetts went to residents, and that this number will increase as the local industry matures, and that the average film job pays $67K per year—with benefits. So whenever you decide to focus on star salaries, please be sure to remind your readers that big stars are also required to pay Massachusetts taxes on their incomes–not just on their salaries today, but on their residual income for years to come (see the UMASS report). Tom Cruise will likely pay more Massachusetts taxes for two months of shooting here, than I will pay in an entire working lifetime. The only difference is that I live here and will be using state services for my entire life. He uses no state services. He just pays taxes! —NP

PSS: Thanks for the positive comments on our website. We view it as a work-in-progress, and we always welcome input on how to make it better. —NP