Michigan to court Hollywood with hefty incentives

In what it bills as the most generous film incentives program in the country, the Great Lake State is announcing today that it will begin offering a 40% rebate on production spending to filmmakers, as well as tax credits for companies that invest in new studios.

"Michigan has a great work force, great locations and now this great incentive," said Gov. Jennifer M. Granholm, who pushed for the legislation as part of a stimulus plan to boost jobs in a state that has been buffeted by layoffs in the auto industry. "We are rolling out the red carpet for the film industry."

So are many others. Dozens of states offer a barrage of rebates, tax credits and training programs designed to carve out their share of Hollywood's entertainment pie.

The move underscores California's vulnerability to so-called runaway production. Unlike most other states, California does not offer film incentives to keep its signature industry at home. That has cost the Los Angeles region thousands of feature film jobs in the last decade as producers have taken their projects to cheaper locales in foreign countries such as Canada and increasingly to states such as New Mexico and Connecticut.

Despite having a former movie star in Gov. Arnold Schwarzenegger, California officials have been unable to agree on how many, if any, sweeteners the industry deserves.

By contrast, Michigan's incentive package was overwhelmingly approved by the state legislature and is expected to be signed into law today by Granholm.

Michigan is hoping to duplicate the huge success that states such as New York, Louisiana and New Mexico have had in growing their film businesses through incentives. For example, production spending in New Mexico, which offers a 25% rebate on spending, has jumped tenfold since 2004 to about $500 million.

Michigan, which has hosted such films as "8 Mile," starring rapper Eminem, and the Tom Hanks gangster movie "Road to Perdition," currently draws only about $2 million a year in film production.

"We felt we needed to grab everyone's attention by having such an aggressive package," Michigan state Rep. Bill Huizenga said. "This is now the new gold standard for any incentive program."