Wednesday, August 26, 2009

The Cassis Legacy: Discouraging Job Creation in Michigan

When you consider the indications that the Legislature probably won't move any major reform legislation during 2010 because it will be an "election year" (and follow that with the sad thought that we can probably just start writing off all the even-numbered years from now on), term-limited Senator Nancy Cassis is now writing what looks to be the end of her career in state government. If that is the case, let the record show that during the worst national recession since the Great Depression, she actively discouraged our state from diversifying its economy and bringing in new jobs by not only stalling legislation on the very successful MEGA business tax credits, all her talk of "capping" the film industry is driving away that business as well.

Already, industry insiders say, the state has lost hundreds of millions in film spending to other states since talk of cutting or scrapping the credit surfaced late last year, a charge led by Sen. Nancy Cassis, R-Novi, chairwoman of the State Finance Committee. Others warn that cutting the credit could push business away from Michigan's fledgling industry simply because there hasn't been enough time to build a sufficient infrastructure -- studios and such -- capable of supporting long-term business.

Legislative proposals, "even if unsupported, cause talk and rumors that cost Michigan a number of productions and jobs," said Jeff Spilman, managing partner of Ferndale's S3 Entertainment Group, which has worked to bring a number of feature film and television series projects to the state.

"We had to go to L.A., put on a really big dog-and-pony show to let Hollywood know that there's no legs to this legislation. Even with that, you still see the state losing production after production."

How many jobs will Cassis cost us before this is over? The meter is now running, unfortunately we won't ever know an accurate job loss figure, but Spilman offers up at least three films that he knows about.

There's no way to tally just how many productions or jobs have been lost because of Lansing-based political talk. But anecdotally, film executives say dozens of projects that were once considered for Michigan are going to other states where incentives are less lucrative, but not facing debate.

Spilman, for example, says he saw three feature-length films go to Georgia last year, after the drum beat began to reevaluate the incentives. Those films could have had an economic impact on the state worth tens of millions of dollars, Spilman said.

Want concrete proof and a big name to illustrate this phenomena? Take a look at Pennsylvania, now offering us a sneak preview of what Michigan might be facing when it comes to our budget battle slated for September. Their harrowing story is an all-too familiar one: Senate Republicans refuse to raise revenue, Democrats won't vote for devastating cuts, Ed Rendell is probably tearing what's left of his hair out, and the state is now two months past their July 1st budget deadline with no end to the stalemate in sight.

Come see who is leaving Pennsylvania because of this over the flip...

M. Night Shyamalan likes to shoot in the Philadelphia area, and that brings the region some impressive dollar figures as well as jobs when he does. Now, he's taking that money and those jobs to Canada due to the "uncertainty" on the state's film tax credits.

With uncertainty about whether Pennsylvania's film tax credit will be authorized in the state budget - now in Day 56 of limbo - the supernatural thriller (which Shyamalan wrote and is producing) has relocated production to Toronto.

Though the filmmaker has shot eight of his nine features in the Philadelphia region - for an estimated economic impact of $375 million, according to the local film office - his backers couldn't wait any longer for legislators to approve the incentive that brings filmmaking and jobs to the state.

He's not alone. Other productions are leaving the state as well.

One such film is Destination Home, a movie about a wealthy family that faces adversity during the economic downturn. "We were scheduled to begin shooting Sept. 16," producer Justin Moore Lewy said yesterday.

"We would like to shoot in Philadelphia. But a combination of the tax credit in jeopardy and union negotiations have left us in limbo." The production is scouting locations in Georgia, Louisiana and Toronto, where tax credits are assured.

This will happen to Michigan as well, already is, according to the industry people. You can thank the Senate Republicans for every bit of it.

What's even more tragic is that Nancy Cassis makes Bobby Jindal look like a genius. He signed a package of bills in early July that will position Louisiana to take advantage of all this Republican created "uncertainty" going on in the Midwest.

Governor Jindal said, “These tax incentives are critical tools to give Louisiana a bright economic future. By signing these bills, we’re ensuring that we not only have the ability to remain economically competitive, but that we can continue to move our state forward by making Louisiana the greatest place in the world to find a great paying job and raise a family.”

HB 898 by Rep. Cameron Henry is a Governor’s package bill that increases the film production tax credit from 25 percent to 30 percent and eliminates the phase-down of the tax credit program. Current phase out schedule for the film production credit (currently at 25 percent) is 20 percent on July 1, 2010, and then 15 percent on July 1, 2012.

Georgia, the other big name in film production right now, also offers 30% on their tax credits. The rumor is that Granholm has put 30% on the table for Michigan (now at 42%), which might be a fair trade-off, but we probably should stay a bit above the others until we have the infrastructure in place to keep the business here.

In a real head-spinning move, Cassis wants to use the cuts the Senate Republicans have already made to education as an excuse of why they need to make cuts on film credits. The logic, it burns.

"The fact that we're talking about reducing spending on education is a major problem," Cassis said. "It's not a core part of government to spend on producers."

The "major problem" on education, as you may recall, is the Senate itself. They are the ones who have elminated the Promise Scholarship and slashed per-pupil K-12 funding, rather than do what's right and invest in our state's young people.

Perhaps we should add that one to the Cassis legacy as well then. Diversification, job creation, education - she wants to destroy them all. Someone go get that ready for the Wiki page so we remember just who it was that held this state down when it needed a lift up.