Legislators are considering two packages that would reauthorize film subsidies and earmark money from the corporate income tax to select companies. Because both packages would authorize selective business subsidies, they meet the criteria for inclusion on the Mackinac Center’s Business Subsidy Scorecard.

House Bills 4907-4908 would have taxpayers give media production companies up to 30 cents worth of corporate income tax credits for every dollar they spend in Michigan. Hollywood generates little tax liability in the state, but legislators would allow the tax credits to be sold to other businesses, allowing producers to cash in on the people of Michigan. 

Subsidies for film production are an ineffective way to generate broad-based improvements in Michigan’s economy. Michigan spent $500 million on its previous film program, and the temporary increase in filmmaking jobs, which never amounted to more than a few hundred, disappeared when subsidies stopped.

The film subsidy bills add $2.075 billion in subsidies to be authorized over the next ten years.

Also on the agenda is a package to alter the state’s Strategic Outreach and Attraction Reserve fund and authorize more funds to be spent on it. Included in the package is House Bill 5768, which earmarks $250 million a year for ten years from the state’s corporate income tax to the SOAR program. It also puts $50 million a year for ten years into a program that funds developers and local government projects, among other earmarks.

The SOAR program allows politicians to give as much money as they want to any company they choose, with the only limits being what has been authorized and further appropriations committee approval. No other state operates a program like this.

So far this term, legislators have authorized $4.4 billion in business subsidies. These bills would add a further $5.075 billion to the scorecard. This would dwarf the 2007-08 Legislature’s previous record for most subsidies approved.

Business subsidies are ineffective at creating jobs and expensive to taxpayers. Yet lawmakers seem to be convinced of their effectiveness and are on the verge of approving record amounts of transfers from taxpayers to select companies.

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