When Gov. Rick Snyder of Michigan slashed the budget last spring for his state’s generous film and television production tax incentive program, he drew heavy fire. Michigan’s program had been praised by both Hollywood and Detroit as a boon, helping to create a relatively small growth sector in the state at a time when most industries had been doing the opposite of growing. A study by Ernst & Young—and commissioned by several Michigan tourism agencies—found that in 2010, the state spent $117.2 million on tax incentives and generated $503 million in economic activity as a result.
But Snyder, a Republican who had vowed to crack down on tax relief for big business, cut the program’s budget to $25 million—a fraction of its typical annual expenditure since it went into effect in 2008, and well below what many felt would be necessary to hold Hollywood’s interest. The result, according to those who backed a robust incentive program, has been disastrous.