Four of the state's major convention bureaus got together last year to commission a study on the then-newly-enacted film industry incentives in Michigan.
Amid debate at the state level whether the incentives should continue, the results of that study now are in, and they seem pretty conclusive. From each dollar that was given out in film production tax credits in 2010, just under $6 was spent in return in Michigan.
The research study was designed to assess what kind of return the state was getting from its investment in the incentives. It was performed by international accounting firm Ernst & Young, and was commissioned by the metro Detroit, Grand Rapids, Ann Arbor and Traverse City Convention and Visitors Bureaus.
Larry Alexander, president and CEO of the Detroit bureau, says the study shows there already has been a positive return on Michigan's film production tax credit, even though it's been active less than three years.
"We weren't sure what the report would show," says Alexander. "When the final report was presented to us last week, we were delighted to learn that this fast-growing new industry had already created 3,860 full-time-equivalent jobs for Michigan residents in 2010."
He says those jobs were at an average yearly salary of $53,700, and boosted statewide sales numbers by $503 million in 2010, which comes out to $5.94 spent in Michigan for every dollar given in film tax credits.
The net cost of credits given to film, TV and digital gaming production in Michigan, including taxes, fees, and unemployment insurance benefits, was $52.5 million in 2009, and $84.7 million in 2010, according to the report. Alexander says that money has clearly come back many times over, and has helped foster a new industry in a state that's been struggling to widen its employment base.
"Diversifying Michigan's economy by investing $84.7 million--and generating over a half a billion dollars of economic activity and nearly 4,000 high paying jobs--sounds like a pretty good deal to us," he says.
The full report is
available online.
Writer: Sam EgglestonSource: Larry Alexander, Detroit Metro Convention and Visitors Bureau
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