Unions Seem Determined to Kill Michigan Film Industry
by Frank DeMartiniA lot can be said about unions supporting wage earners and creating a middle class. However, a lot can also be said about unions ruining this country. Case in point: Michigan.
You would think that after the UAW destroyed the auto industry and the tax base in Michigan, the people of the state and the unions based there would have learned. However, this is not the case. In the latest union disaster for the state of Michigan, the IATSE has decided that the blooming film industry in the state must be stopped before it even gets started.
As most of you in the film business know, the state of Michigan has one of the most lucrative tax credit/rebate programs in the industry. The state gives you 40% of every qualified dollar that you spend in the state. In addition, if you shoot your film in a few core areas such as Detroit, you will get an additional 2%. That’s a whopping 42% of what the producers’ qualified in Michigan spend. On a 20 million dollar budget, this can amount to a gift from the state of Michigan of approximately 6.5 million dollars after you subtract the non-qualified costs.
Other states have tax incentives, but none even come close to these numbers. Louisiana, which has the oldest and most tested tax incentive, just increased their program from 25% to 30% and loosened its requirements in order to compete with Michigan. South Carolina is also considering an increase in its program in order to compete.
Smelling blood in the state, IATSE has decided that any economic growth in Michigan caused by this program must be stopped. In the latest deal struck with the AMPTP, the IATSE has changed Michigan’s ten most production friendly counties into the Maryland Rates. The change effects Ann Arbor and Detroit’s scenic and wealthier suburbs.
You may ask, how is this killing production and the economy in Michigan? Well, prior to this union agreement which takes effect on August 1, 2009, most of Michigan, except for Detroit’s Wayne County, came within the Area Standards rates which cover most of the country, including South Carolina and Louisiana. According to a production executive at my company, the additional cost of the Maryland Rates will be almost $500,000 over the course of an average production. Hence the benefits of the 40% in tax credits is gone.
Producers will do what they always do and go running for the best deal. With this additional cost in Michigan now, it will probably be back to Louisiana, South Carolina or one of the other states that come within the Area Standards IATSE deal. So, another union is doing its best to destroy Michigan. And yet, the liberal government in Michigan allows this to happen? Why do the people of Michigan sit back and watch their beautiful state head into oblivion?
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128 Comments
haven't we learned that high fees and taxes drive away business?
So if a state figures it out the unions come in to undo the fix
It is har to understand
UNIONS=DEATH OF A COUNTRY!
I grew up around Philly. The unions there were all about having goons beat up scabs. Unions need things like non-secret ballots, closed shops, and Obama and his thugs to survive. They certainly were a huge factor in the demise of the Detroit auto industry. Just my opinion, though.
Frank, with this primrose path we seem to be heading on, all the incentives will be gone, so instead of filming in any state, they'll shoot it in New Zealand. Tax bases are eroding everywhere, and the Unions? Right now they seem to be in the proverbial catbird seat, owning GM & Chrysler, so what do they care. Kind of sounds like a locust infestation.
I have a lot of relatives in Michigan- I need to ask them if all people in Michigan are CRAZY???? WHY DO THEY KEEP VOTING DEMOCRATS/UNIONS???? Not enough unemployment for you? The local economy not depressed enough? Too little poverty and crime? Michigan-pull your heads out- the WORST places to live in the US by ALL normal criteria (not some prissy "eco-recycling standards" or "animal sensitivity issues") are run by liberals and blind power-hungry-feed-the-beast-Democratic-vampire-Pelosi-ites! Look at the US map and I dare anyone to refute this- certainly some people in MIchigan THINK????
How would you like to be in Ford's position, negotiating labor contracts with the UAW, who also owns your competition, GM and Chrysler? I'm sure the Government will step in and help Ford on this one.
After what happened with GM and Chrysler, IT IS UNAMERICAN TO BUY VEHICLES FROM THESE TWO UNAMERICAN COMPANIES. Buy Ford or Foreign, not from the goons who destroyed two American giants who produced tanks and everything else during World War II.
Sad, but I will never buy or rent a vehicle made by them again. Ever.
Notice how the news is not reporting how well Ford is doing? Can't help the competition to Government Motors……
Amen, Mr. D! I moved from Michigan last summer, and I feel bad for my conservative family members, but boy, can't wait until my union-cowtowing aunts and uncles can't get in to see the doctor—-the surprise! Yet they would get annoyed when any member of my branch suggest that they think beyond what their union and the Detroit Free Press told them to do…..
Jack – where can I order Montserrat?
On the behalf of my state, let me say….
WELCOME TO KENTUCKY!!!!
We'll take your business.
does that count 'used' before they were taken over by THE ONE!
The Unions never gave an inch with the Merchant Marine, they even used their pension funds to buy a couple old ship to keep some of their members at work, but now? how many US-flagged ships carry cargoes, US or foreign, anywhere? But the Unions did a great job, didn't they, had to destroy the industry to save it from falling into the hands of the capitalists.
I hope stories like this will encourage Americans to start boycotting all unionized corporations. For example I will never buy a GM car now that the UAW unions have been given preferential treatment over bond holders, in direct violation of contractual law by the way, in the government takeover of GM (Government Motors). Let's show unions how we feel about them by not supporting them with our dollars.
This has been a terrible program for the taxpayers of Michigan. There is no transparency with regard to the expenditures of the film company but the state has paid out millions more than the small, local, temporary jobs that are created. Other than food, lodging, a bit of transportation and rental of sites, there is very little revenue generated. Yet, all of the cast and crew salaries get rebated in cash back to the film company. We know that the cast making millions per picture are not staying in the state and spending their salaries in Michigan. Conservatives across the state want this program stopped immediately since the governor refuses to even give an accounting of how the rebates were arrived at and disbursed. Glad to see the unions on the side of thinking Americans for a change.
So no-one here has an issue with Michigan tax dollars being given to Hollywood movie producers to begin with?
Class warfare at its finest. Imagine the precedent this will set.
Howdy Jed… The usual places, B&N.com, Amazon, ebay. Thanks for asking. AJ
I live here in Michigan, and it is a sh*thole. It will continue to be a sh*thole until it becomes a right-to-work state.
I'm confused…I'm only an American if I buy a foreign-made car?
Michigan, City of Detroit, and the State of California is proof positive you can't let the Left run anything.
Well, actually… they'll be happy to run it.
Into the ground.
Not at all…it's a case of "spending money to make money." It's an initial investment by the state that gets paid back two-or-more-fold by what the production brings to the region.
Unions are all run with a mobster mentality to steal every dime from the company or in this case film companies that come into town to shoot a film. We need to bust these unions up, especially the Guilds here in Hollywood. They have outlived their usefulness. In the 20s we needed them to deal with owners who had a 19th Century mentality about ownership of a company and profit. Today it is different and the Unions have become what they were fighting in the early 1900s. I worked for 5 years in Monsanto chemical Co. I was in the international Chemical Union, my dad worked there for 37 years until he retired. He was always grateful towards Monsanto for providing a living so he could give us a wonderful life and education. When I worked there in the 70s you could see how some Union guys just hated the company and they would do anything to cost Monsanto money. Well year after year it all adds up and one day in 1988, eight years after I left the plant. The home office closed that plant down. There had been a chemical plant there providing jobs since 1859, Monsanto bought the place in 1903 it was their first pilot plant and when my Dad got hired in 1950 there were 3000 men on the clock. When they close the plant there were about 200. The Union and Green Peace finally did them in. I had heard that the biggest big mouths that hated the plant, that would steal supplies, that would ruin or damage product so there would be down time on their shift, these bums cried the loudest. They were all in their late 40s to 50s then and who was going to hire you if all you ever did was be a chemical operator? This was the union mentality, its from the mafia getting in the unions in the 30s and the commies in the 20s. They projected their hated for the corp world who pays them to feed their kids. This is the insanity of liberalism they always bite the hand that feeds them. If you cut into a man's profit margin what is his incentive to get out of bed everyday and deal with all the bullshit it takes to run a company. Then you have to dal with total idiots who want you to pay them through the nose so they can sit around and shoot the shit for 8 hours.
Class warfare is one of the main tools in Democrat bag. There are more middle calss and "poor" people numerically than upper income or rich people. It's a numbers game. It goes back at least to FDR. God Bless ol' FDR but for a rich man he sure liked to demonize other rich people and play the "wants" against the "haves". To this day MILLIONAIRES like Teddy Kennedy get up in the Senate and bash people that have achieved success with the sweat of their brow and brawn of their backs. This country is FULL of SELF MADE sucessful people that have benefited from their own industry. Recently a report came out stating that their are 19% LESS MILLIONAIRES IN THE U.S. than last year. Liberals everywhere must be celebrating. I NEVER made a SINGLE THIN DIMEfrom some other guy NOT SUCCEDDING. It never helped me if someone else failed…our economy and our very society are not "zero sum games".
Class warfare is one of the main tools in Democrat bag. There are more middle class and "poor" people numerically than upper income or rich people. It's a numbers game. It goes back at least to FDR. God Bless ol' FDR but for a rich man he sure liked to demonize other rich people and play the "wants" against the "haves". To this day MILLIONAIRES like Teddy Kennedy get up in the Senate and bash people that have achieved success with the sweat of their brow and brawn of their backs. This country is FULL of SELF MADE sucessful people that have benefited from their own industry. Recently a report came out stating that their are 19% LESS MILLIONAIRES IN THE U.S. than last year. Liberals everywhere must be celebrating. I NEVER made a SINGLE THIN DIMEfrom some other guy NOT SUCCEDDING. It never helped me if someone else failed…our economy and our very society are not "zero sum games".
Class warfare is one of the main tools in Democrat bag. There are more middle class and "poor" people numerically than upper income or rich people. It's a numbers game. It goes back at least to FDR. God Bless ol' FDR but for a rich man he sure liked to demonize other rich people and play the "wants" against the "haves". To this day MILLIONAIRES like Teddy Kennedy get up in the Senate and bash people that have achieved success with the sweat of their brow and brawn of their backs. This country is FULL of SELF MADE sucessful people that have benefited from their own industry. Recently a report came out stating that their are 19% LESS MILLIONAIRES IN THE U.S. than last year. Liberals everywhere must be celebrating. I NEVER made a SINGLE THIN DIME from some other guy NOT SUCCEDDING. It never helped me if someone else failed…our economy and our very society are not "zero sum games".
I'm a member of Screen Actors Guild and the problem with that union, as with many unions, is that the militant leadership doesn't care if they ever actually work in their own industry again. In addition, they don 't understand the law of supply and demand. With every new contract they demand more and more from the producers even at a time when demand for union talent is in decline. The result, there will never be enough work in California again to support the membership like we had back in the mid-90s when I first started working the Biz. Why shoot in San Francisco or LA when Vancouver is cheaper and you're out of SAG jurisdiction?
BUY A FORD!!!! Or a well made Honda or Toyota… most Honda and Toyota sedans are assembled in the USA by American workers…the UAW hasn't toally destoyed the American automobile YET!
See above. I'm a blue bleeding Ford guy, no Federal tax payer $$$$$!
Unions are parasites. They feed on the host until the host is dead.
Texas has been a "destination state" until the bird brains in the Texas ledge, mostly a "nest" of idiot Democrats tried to kill tax incentives that drew productions to Texas. The State of Texas has continued to do a good job of drawing projects to the state but sometimes it's frustrating to see productions go to Canada or even Australia when they easily could have been made in Texas. ESPN made a great little movie "The Junction Boys", about the legendary football coach Paul "Bear" Byrant and his season at Texas A&M. It was a particuarly brutal traing camp in Junction, Texas a near desert location west of Austin on the way to west Texas. THE FILM WAS MADE IN AUSTRALIA! There are MILLIONS of DESERT ACERS IN TEXAS to make a movie about, er…TEXAS! VERY FRUSTRATING. On the good side our adopted TEXAN, the lovely and talented Sandra Bullock does her level best to shoot in Texas when ever practical. We LOVE SANDY and she'll always be a TEXAN in our hearts…her new husband is a Cali guy but that's cool as long as she's happy.
Add NYC and Boston and Seattle to the list…
The more these unions demand things a certain way because of their ignorance, hatred and rage, the worse it will be. When they see things getting worse, they will blame everyone else other than themselves for the problems they caused. It's a self-perpetuating cycle.
Is this a form of evolutionary Darwinism?
I really feel like we are living in "Bizzaro World." Honestly, the unions owning the car company blows my mind. If I understand correctly the unions agreed to a no-strike clause in their new contract. Ford doesn't have such a contract with the union. Kind of an unfair advantage.
I was a long time GM man, care to guess where my next vehicle will come from?
Dan, you're obviously a fine American…you'll make the best decision based on your automotive wants and needs and do what's best for your family, and you country….speaking as a Mustang guy, I really like what I see in the new Camaro. I had a '67 Camaro conv., a 67 RS/SS (not a fake, it's in a collection now) a 68 door slammer hot rod and a 69 RS conv…all great fun. That said, I love my Mustang, it's fast and just squirrely enough that I still feel like I'm driving "old school".
Has anyone ever explained to the rank and file of unions the waste the demands of the union bosses cause?
Regarding being UNAMERICAN if you buy a new GM or Chrysler product… yes, that is what I mean. There are enough Japanese car makers here doing well, paying well, building well and hiring Americans that we do not need to support two Government-owned car companies. Control of these two Government-owed (U.S. and Canadian governments) is being given to the United Auto Workers and their underling supporters. Goon-squads, all. Throw in the environmental extremists to whom he owes the "Clunkers for Cash" program and "Cap and Trade" and this whole auto industry take over was planned down to the last rear-view mirror and pull-out cup holder.
How long will it be before we are forced or penalize by THE ONE and the government for NOT buying from GM or Chrysler?
BTW, I am a Republican in the People's Republic of New Jersey and I own a mid-90s Geo Metro. Proud of that little go-cart at 130K miles. Bite me, Mr. President! ; )
You should say Buck you, Mr. President. It is the latest thing.
As a resident of Michigan, I disagreed when our Democratic governor Jennifer Granholm decided that 40% tax breaks for film production was the way to go. Michigan actually loses money when films are made here, but she and the legislature were too star-struck to see it! I am hopeful that the money spent on tourism promotion is more effective. Our dunes and beaches are the best in the world! (and my new Saturn Outlook is awesome too!)
Unions, the permanent solution to a temporary problem.
I am avoiding TV these days. Is the SEIU running "support ads" for ObamaCare or did they finally run out of money?
How can a city lose money when a film being brought to a city means money for the citizens who live there and buy things from the local vendors which then buy things, etc, etc, etc.
When the TV is on, I notice Ford ads running several times an hour. Hardly any GM ads, especially after the "We are not dead yet!" campaign, maybe one or two Chrysler ads a night. I think it is pretty obvious who is doing better, as in the one who still has an ad budget.
If it is older, still in good shape, for a good price, buy. Then keep it well maintained. Soon they will be collector items from "the good old days."
Maryland rates and Area standard rates aren't phrases that really mean anything to me. What are the actual differences?
I'm normally not at all fond of unions but it seems that they are usually created in response to real needs and then sort of jump the rails after those needs are met.
As an example, I went to a film-crew event thing here (promoting a program to train the crews) in New Mexico and the guy running it explained about when the union here was formed. I'm thinking… Union! Ack!… but he explained that before the union existed film crews would be required to be on site and ready to go at some ungodly hour in the morning (still true) but that they wouldn't get *paid* until the talent showed up (no longer true.) Now… that seems fair to me and the old system seems exploitative and it seems like a good thing that people got together and organized and put their foot down and demanded to get paid for their time.
Fine and good so far… I have no idea what *else* the union here has done and if/when they get to the point of looking for yet the next thing to demand in order to keep themselves relevant, then they've become the parasite that unions tend to become, that consume their host until everything is dead.
Because "tax break" isn't quite the right term
It's a kick-back. Suppose I actually finish my script and sell it. Because I live in New Mexico, the state of NM will send the purchaser a check for 1/4 of what was sent to me. Now… I'll probably be taxed 25 or 30%, at least, on my income from that sale, depending… so the state collects that tax, and sends it all back to the purchaser of my script… so the State makes nothing and still has the expense of processing the kick-back all above board and legal.
It's possible (and wouldn't that be sweet) that I get one of those fantasy deals and a check that pops me right up to a 50% tax bracket, and then the state makes some money because they collect more from me than they kick-back to the purchaser.
The wages for film crews won't be that high so the income for the state is mostly canceled out. The same with any other "qualified" dollars… so we're left with incidental expenses that don't get reimbursed. And someone is still paying for the film promotion office and extra police hours when necessary and stuff.
It still might be worth it and it *does* employ some people (and mess up traffic) and it might be a good idea in the long run and might help the local and state economy.
But I'm describing a 25% kick-back rate.
I don't know how a State could do anything BUT lose money with a 40% kick-back rate. That's easily paying *out* more than will be taken *in* by the state in taxes.
Maybe someone could explain the magic math so it actually makes sense but, quite frankly, it sounds an awful lot like being firmly in "underpants gnome" territory where the "profit" part just sort of *happens*.
"Unions, the permanent solution to a temporary problem."
What I meant to say… but better.
I remember when they did that on national TV while picketing an NFL game. It was almost as embarrassing as the game where Eagles fans pelted Santa Claus with snowballs at halftime on national TV.
I don't miss Philly at all.
I think there are more auto workers employed in Mississippi, Alabama, Georgia, Tennesee, Kentucky and North Carolina that in Michigan and points north. All non-union of course, and taking home paychecks.
Jamesb this is one of the few times I have disagreed with you. While I have been very suprised with the quality of Fords new cars, they still have a "long" way to go to shed the poor quality image they have with the public. Honda is still a well made car but their designs are dated and the cars generally have no soul. Hondas are transportation, nothing more. Where I alter course with you is Toyota. They have become a company living on past success's. The fit and finish and overall reliability of Toyota is a myth anymore. An example is the fact that in 2007(maybe 06?) Toyota had the dubious distinction of "Recalling" more cars that year than they produced.
At the end of the day, all cars, no matter if they are Ferrari or Ford, Buick or Bugatti, suck! I've seen $110,000 A8L Audi's blow engines in a 100 miles and a 76 Chevettes with 320,000 miles on it. It's a crap shoot when you get a car no matter who makes it…..It's all about what badge you want to see when you open the garage door………
Buy what you like, not what someone tell's you is good or is the proper patriotic car to buy!
I absolutely love my Chevrolet Trucks (about to buy a new one) and my race car Camaro's, but if and when I see the need for a sedan it will be a BMW……End of story…………..
Vainamoinen
Buy what you like, not what someone tell's you is good or is the proper patriotic car to buy!
I absolutely love my Chevrolet Trucks (about to buy a new one) and my race car Camaro's, but if and when I see the need for a sedan it will be a BMW……End of story…………..
I fought unions all my working life in the USA, after leaving England and Canada, where I was told to slow down on the job. I just bought a Toyota for my wife. Cash! Which I was able to earn by doing a good job and by, "Always being worth more than I was being paid."
Unions!— So 1800s.
Yeah, I'm pretty much "Homo Economicus". I was trying to gently point out to JamesB the logical flaws in his statement. Too much emotion rhetoric is what got us Obama in the first place.
Yeah, I'm pretty much "Homo Economicus". I was trying to gently point out to JamesB the logical flaws in his statement. Too much emotional rhetoric is what got us Obama in the first place.
Not all people in Michigan are crazy but with all of the union members (UAW, teachers, government employees), welfare recipients, country club liberals, and Ann Arbor residents the Democrats will probably be in charge of this State for many years to come. Unfortunately.
It is sort of like a salesperson buying their own products just to get the commission.
Granholm is such an idiot though because she touts the policy as a huge success but won't cut business taxes for MI companies or other industries.
I remember reading someone who was talking about predicting the future. They wrote about the mistakes people tend to make when trying to predict the future. One is assuming any negative trend would reverse itself. Another bad mistake was to assume that any positive trend would always continue. I suspect the union is guilty of that. They see so many dollars being spent to make movies in Michigan. They assume that same money will be spent regardless of how much they charge so they raise their rates. They calculate how much more money their union memebers will be making, how much more in union dues they will be making. And when the movie production moves to some other state and their union members complain, well, obviously it is Hollywood's fault.
It's the same mistake governments make. They collect X dollars in tax revenue this year, raise the rates and confidently predict X + 12% in revenue next year. When people move or figure out how to avoid taxes and the government takes in X – 5%, well, "that was unforseen", "there was nothing I could do about", "it wasn't really MY fault" and "we will just have to pay for that with future tax revenue".
You would like to know why the people of Michigan put up with this sort of thing? I have family in Ann Arbor – a true liberal swamp if ever there was. If they were home and the head of the DNC came by, set fire to the home, they would either site there and comment on how lovely the fire was, or they'd offer you marshmallows and a stick to toast them with….basically, they're idiots. I love them to death, but they shouldn't be allowed to use sharp objects, operate power tools or go out in public without a chaperone. And they seem to be typical of every Michigander I've ever met.
Just find it hilarious that Hollywood gets tax breaks at all, seeing how everyone living there wants to raise taxes on everything that breaths.
Unions are killing a film industry in a state where no one is working anyway?
Oh well, Michigan…you can always be the national landfill. I'm sure the Canadians won't mind.
Unions are killing a film industry in a state where no one is working anyway?
Oh well, Michigan…you can always be the national landfill. I'm sure the Canadians won't mind having you next door.
and as a "payoff" UNIONS will be exempt from stifling FEDERAL TAXES caused by "OBAMACARE"…disgusting…Unions have outlasted their usefullness by about 50 or 60 years…
Although my last post was fairly cruel, I'd really like to see lower unemployment in Michigan and everywhere else. But if you fuchs don't get wise and ditch all this feed-me union BS and the damn Democrat gimme playbook handouts, you're gonna starve and working America isn't going to stop it for you. You'll just be screwed.
Although my last post was fairly cruel, I'd really like to see lower unemployment in Michigan and everywhere else. But if you folks don't get wise and ditch all this feed-me union BS and the damn Democrat gimme playbook handouts, you're gonna starve and working America isn't going to stop it for you. You'll just be screwed.
Although my last post was fairly cruel, I'd really like to see lower unemployment in Michigan and everywhere else. But if you folks don't get wise and ditch all this feed-me union BS and the damn Democrat gimme handouts, you're gonna starve and working America isn't going to stop it for you. You'll just be screwed.
I'm from a historically non-union state – North Carolina. I remember reading in textbooks about why unions came to be and understand that at one time in our nation's history they were needed. But it seems now that they are just a bunch of bullies. As the saying goes, "Absolute power corrupts absolutely."
This is the weirdness of the incentive programs: I doubt the states shoveling all that money directly to film companies are getting their money's worth in salaries/taxes in the long run. Location film jobs are great–but they are also very short term. You may have jobs for a few months at best. And what happens when those incentive funds run dry? New Mexico and New York have recently run into that problem. Synova explains it much better down below in response to LorLor.
Beautifully explained! I'll be honest–I work in film in Los Angeles, and while I acknowledge it's a bit of a boondoggle, i wish Ahnuld had been able to swing something better here, just to keep the jobs in state.
Beautifully explained! I work in film in Los Angeles, and while I acknowledge it's a bit of a boondoggle, i wish Ahnuld had been able to swing something better here, just to keep the jobs in state.
Beautifully explained! I work in film in Los Angeles, and while I acknowledge it's a bit of a boondoggle, i wish Ahnuld had been able to swing an incentive program here, just to keep the jobs in state.
I'm was a long time Ford guy, retail dealer guy (sales, management and order/trade guy), and I'M SO PROUD of FORD! I drive a Ford, Ford helped me make a nice living for a long time and I worked with many good solid Americans that weren't theives out "screw the customer". I sold a solid product I was proud to be associated with "salt of the earth", hard working farmers and ranchers as well as families that wanted a vehicle that would suit there many needs. Ford saw the 'red ink' THREE YEARS AGO and set out to fix itself, not wait for an Obama and then BEG FOR BILLIONS of TAX PAYER $$$$$$. Bill Ford stepped aside, they hired Alan Mullaly and they WENT TO WORK. Now they are bucking the market trends…I smile every time I pass a new Ford on the road, THAT'S HOW THIS COUNTRY IS SUPPOSED TO WORK!
Wages for film crews are actually pretty darn high, even in non-union projects. States desperate for cash will chip in for some sundries but the movie crew generally brings in more than enough to offset the cost (it's simple math – if you're saving 40% you're PAYING 60%).
There's also the spread factor. Film crews bolster other business.
I don't think corporations are 100% good, or that they could all be left to their own devices with no negative repercussions. But I don't get why everyone's always outraged at 'tax cuts for the corporations', or 'incentives for the corporations'. Corporations are how we earn money to buy food. I'm no economist, but I'd have to say 'giving' money to an entity that brings in business makes more sense than just giving it to people who give nothing back, or pumping it into a bottomless government/entitlement pit.
I do these all the time. You are incorrect to call it a "kick back". At no point does the state write the producer a check. The state does not pay these funds.
What does happen is that the state issues a tax credit that can be redeemed INSTEAD of paying that amount in state income tax. At the worst, the state sees a decrease in tax revenue, but does not incur a cost. The difference between the two is substantial.
Here's an example. The state issues the producer a tax credit for 10k just to keep it easy. The producer sells that tax credit to a state resident for 9k. So, the producer walks away with cash equal to 10-20% less than the amount that the credit is issued. Now, the state resident applies the 10k against the taxes that they owe. They basically paid 9k to write off 10k. They essentially get a 10-20% tax cut.
What does the state get? Well, they get jobs, training, infrastructure, and additional private capital flowing through the community. Several residents get a tax cut against their state income taxes which they either invest, spend, or save.
It's really the age old debate about Keynesian economics vs. reality. State tax credits are a great way for the state to actually help the marketplace. It's not a failed, goofy thing like say having the government spend $787 Billion dollars on a "stimulus".
fine all you anti-union a-holes can go work at wal-mart or join the illegals working in the yards … good for you puke repugs
Actually, I have to politely disagree. A viable film industry in Michigan would help improve the economy over the long run. It's one of the few things Granholm has managed not to buck up in Michigan–until now.
As a Michigan resident, businessman paying $500,000 / yr in taxes and Republican, these tax incentives cost taxpayers a lot. Yet we support these supply side economics because they are proven to work. Lots of investment came in and yes the industry seemed to be blooming as noted by, among other things, the planning for development of production studios and facilities. And now I'm sorry to see the Unions have destroyed another start-up industry in our state. And I'm not surprisred our lame DEM governor is doing nothing. Let me say something you won't hear on national news. The UAW is what destroyed GM and Chrylser. Yes the credit crunch / recession was the last straw that broke the back. But with decades of accrued health / pension benefits destroying their balance sheets with benefits they just couldn't afford to pay, they buckled. Every automotive CEO since the 1998, the last major strike year, knew a bad ending was eventual. The lesson is: If a Union can strike a business out of business like they did the autos, eventually that business in dead or the Union will own it. Its just disgraceful and here in MI, its just sickening to see that Obama just handed the UAW huge stakes in those companies and wiped out secured lenders. Warning to all: BEWARE OF CARD CHECK LEGISLATION FOR UNIONS. It will destroy lots and lots of businesses and depress hiring!
I always love to see a Toyota or similar pickup truck with a "buy union" bumper sticker -
That's a good question – why Michigan keeps voting in Dems. Detroit has a functional illiteracy rate of 47% – look what decades of Democrat-only rule have done to that city and yet they just keep voting Democrat. What does a 47% illiteracy rate say about the Dems? On whom can they blame their utter failure, having brought literacy to nearly the minority status?
I have already decided that I will never purchase another vehicle from either of these companies. Both damaged the shareholders and secured shareholders to the benefit of Obama's beloved UAW. My state of Indiana held preferred Chrysler stock in our pension fund, which we were told arbitrarily we would get 19 cents on the dollar for. The government has gone out of control and like Rush said, I hope Obama fails. We cannot just sit back and say 'the end justifies the means' and let him and his 'czars' take over the country. Our Founding Fathers would be stunned – and if they'd had a crystal ball to see what is being done now, they would have made some serious changes to the Constitution in the first place.
I was in a union and saw more out and out hatred within that org than you'd probably find in a meeting of the Klan. After a prolonged layoff (when favored members kept working while others never got called) one man with kids had to leave for another line of work. He wrote a very polite letter to the union to inform them that he was going to 'bench' his ticket so he could go into another kind of work. The letter was read at the meeting and the members (half of whom were already drunk) hollered insults and worse about this guy while the letter was being read. Then there was the hate literature sent to my home in the guise of 'union newsletters' in which non-union people were called 'scabs' and 'rats' and horribly portrayed in disgusting 'cartoons'.
I've seen union members steal whatever was not nailed down, sabotage jobs and equipment of non-union companies, and frankly I've seen enough of union violence and intimidation that I have no doubt that unions are run by thugs for the weak-minded and simple-minded sheep who can't get by any other way.
I am happy to say that I am no longer in the union, and max, your letter speaks pretty effectively for the mentality I'm glad I escaped from.
"I'm normally not at all fond of unions but it seems that they are usually created in response to real needs and then sort of jump the rails after those needs are met."
That happened many decades ago. Unless you give them every single advantage, and antitrust – monopoly permissions denied to business, they will go out of business – and they are businesses – on their own. The problem is that they represent a huge block of votes for the Dems. And the Dems buy their votes wholesale. If you are in a group, they "care" about you (or your group anyhow). If you are on your own you don't exist to them. When the Dems talk about caring for 'labor' or 'the working person' what they mean is ORGANIZED labor and the working UNION person. They will take any and every action detrimental to the working non-union individual to benefit their union voting base. If it doesn't help UNIONS then to them it is bad for 'labor'.
ACTORS want to raise taxes… do film companies?
American liberalism = death of America as we know it.
United Socialist States America
You'll pitch a bi_ch about Bush spending; but Obamanatiion Has spent more than all presidents
combined and not a peep from the dumb-o-crats. When was the last time you spent as much as you could to stop from piling up debt? Stupid is as stupid does. Wait we will pay for this big time what a joke. like
man-bear- pig himself, I serial!
"certainly some people in MIchigan THINK???? "
Not necessarily. I think the term is "useful idiots". And before we laugh up our sleeves at Michiganers, just remember 53% of us voted for Obama.
Frank, although I agree with the title, it's two words too long.
I don't know why, but the biggest "pull my neighbor down in case he's getting too high" attitude I have ever seen in my travels in America was in Michigan. It's in the psyche. Just an observation.
I'm not sure I get the math. Why do the new rates cause the benefits of the 40% in tax credits to be "gone?"
You say that previously (before the new rates) the state program "can amount to a gift from the state of Michigan of approximately 6.5 million dollars" but now "the additional cost of the Maryland Rates will be almost $500,000 over the course of an average production. Hence the benefits of the 40% in tax credits is gone."
Subtracting $500,000 from 6.5 million dollars appears to leave a "gift" from the state of Michigan of approximately 6 million dollars, at least if the production budget is the $20 million used in your example. $6 million that's not "gone."
What am I missing? Is the average production budget far smaller than $20 million … maybe more like $1.5 million … so that the "gift" shrinks proportionately and is wiped out by the additional $500,000 in costs? If so, why does your example choose a production budget more than 10 times the average?
Unions like to blame corporate executives for all the problems of their companies, but consider this: Who in their right mind would want to be an executive in a union-dominated firm? I would need a huge pay differential to consider doing the same job at a union company as I do at a non-union company because of the increased hassles working there and also because of the lower prospects for long-term success.
If these powerful special interest groups are successful at getting "Card Check" through Congress (which makes it much easier for unions to bully people into voting them in), then that will be the last nail in America's economic coffin.
Frank – Let me simply say THANK YOU for posting an article that is political but actually relates to the film industry. If Big Hollywood is going to make it, it has to be more relevant to the industry instead of simply taking the ambiguous path down snarky pop politics that has zero relation to movies/Hollywood/entertainment.
Good subject. Good write-up.
We have a toyota plant, they are non union. But we also have two ford plants and the corvette plant in KY. The ford and Vette are union shops.
If I'm reading this right, then the IATSE was going after the STATE SUBSIDIZED film industry in Michigan. Is Big Hollywood now supporting State redistribution of income as long as it supports the film industry? So taking money from those who work and earn is good as long as the money is then given to film producers? Am I the only one seeing a little inconsistency here?
I understand the disdain for Unions, I've worked construction for years and have seen the worst of them, but don't be so knee-jerk reactionary against the unions on this one. Think about what it is that they are doing. They are working to end an income redistribution program. This may be a rare instance of a union doing the right thing.
Besides, if the State taking money from one group and giving to another creates an economic boom, which this post implies it does (no facts are actually presented supporting the assertion) then why should anyone oppose what Obama is doing from his lofty perch in D.C.?
Sorry, Frank, if your production company isn't going to get anymore TAX SUBSIDIES from Michigan taxpayers. I guess now you'll just have to create a product people will want to watch if you want to make money.
There is no appreciable difference between the UAW and the Mafia. The two are just fingers on the same hand.
For several years we lived in S.C. for my husband's job. He works in the auto supply industry (diesel fuel injectors, etc.). He was one of the few "southern boys" brought in to open a new plant. Most everyone else came from a plant in Detroit. Their mentality was so different. They definitely had that "union" mentality. One day my husband snapped and told them that the reason the plant was in S.C. as opposed to Michigan was because the unions had driven them out. That fact seemed to elude them.
My husband is a mechanical engineer in the auto supply industry. He had to travel to Detroit several times for his job. While he was on the plant floor, he had to have union "handlers" with him at all time – guys just paid to follow him around and basically do nothing. He said they probably made more than he did.
[...] BIG HOLLYWOOD: Unions seem determined to kill the Michigan film industry: You may not have known that Michigan has a film industry, but it does. There are significant incentives, put out by the state government, to attract films to shoot in the Wolverine state. [...]
Obviously a bunch of Rethuglican apologists spouting off here. Without unions, so-called free market capitalism is allowed to drive down wages to levels the Chinese now enjoy. It's the anti-American corporations in this country that have given us this economic disaster we find ourselves in. Unless you're advocating driving down the cost of goods and services to 1950's levels, don't bitch when people require above poverty level wages to survive. Sounds like a bunch of elitist fascists posting today. We need to return to a tariff based economy, 90% tax rate on earnings over a certain dollar amount, as it was in the 50's, and we'll stand a chance at returning to a normalcy in our economy. Leash the banks as well- regulate the bastards, and force them to lend a healthy percentage of our money back to us in the process.
Well, I run a catering company and I can tell you the film business is great. It allows me to pay my vendors..and we buy thousands per film from food, gas, disposables, florals, rental tents, tables, chairs, etc.; pay employees, not just those on the film, but behind the scenes, etc. The dollars I am paid is put right back into MICHIGAN's economy. That money is then spent over and over again. The incentives are working. It's keeping my small business of 34 employees working and making a decent wage.
As for the Maryland Rates….just another stupid Union Move. This country needs to disolve the unions…but tell that to a bunch of Obama supporters…those of you who voted the @#$@#% into office. This latest union move…it's just par for the course.
Well, it sure beats being an apologist for the Bush Crime Family. So called conservative values got us to the depression we find ourselves in. You can thank them. Liberals are the majority in this country, get used to it.
Keep on believing that. Hey, I have some swamp land in Arizona you might like. Small bills only.
I'm a resident of Michigan, and a film industry worker. When I let someone who's a LAWYER and a PRODUCER tell me that I'M greedy, that will be the day!
Mr. DeMartini feigns concern for Michigan's film industry when his real motive is nothing more than to challenge anything that might monetarily benefit anyone other than himself. The 40% he would save on money spent here is simply not enough, he must have more, and this means feeling it's his God-given right to pay absolutely the lowest possible wage.
The several dollar-an-hour bump crew members will get should bring up their hourly wage to a fraction of what he gets to be driven to set in a limo, and sit in a monogrammed director's chair oblivious to the people running cable, lifting shot bags, building sets-i.e. actually making his movies. Long before those crew members have sleepily driven a hour plus after their 14 hour workday to get home he will have been chauffeured to his deluxe suite, along with whatever relatives he's bestowed with the title of "associate producer".
I hate to shock you, Mr. DeMartini, but the Michigan Film Incentives were not designed for you, but for the people of Michigan- the people who will pay their mortgages here and purchase local goods, not prance off to Rodeo Drive and hit the boutiques. The incentives are designed to bring money INTO Michigan, because God knows we need it.
Comparing Michigan's auto union situation to IATSE is simply apples vs oranges- one has nothing to do with the other, except for the cheap shot of drawing parallels between the poor state of Michigan's economy and the union staffed by the nameless drones you have to grudgingly pay to make your films.
Maatkare, Michigan' s Jenny on the Block has traveled the world, Evita-style, to "grow jobs" for Michigan….the return on her travels and expenditures are small compared to what Michigan taxpayers paid for her to see the world…though she "did not have the time" to meet with automakers (Mazda or Toyota, can't remember which) who were looking for a place to build a new plant.
At least with the incentives given to filmmakers, we might see a depiction of the state that is more "Somewhere in Time" and less "8 Mile".
I grew up in Michigan, and I knew this was coming a long time ago. There was a newspaper strike around 1995. Among the complaints–the guys driving the trucks around and dropping off newspapers (AKA "rocket science") were complaining that they only made $50,000 a year. Fifty grand to drive a truck around and drop off newspapers? And that's not enough? (I was making $6.50 an hour managing a restaurant at the time, so this one really stuck in my craw.)
My friend who worked at General Dynamics in Detroit told me that he had to have a licensed electrician plug in any appliance, including a vacuum cleaner.
Obviously not sustainable, but they don't care so long as they get theirs. They could give two squirts of pi$$ about "the working man," their company, or their state. All they care about is making grossly inflated wages and using the patronage system to get their kids union jobs. You think you've got a shot at one? Only if you can answer the question, "Who sent you?" Regular Joes don't stand a chance.
[...] BIG HOLLYWOOD: Unions seem determined to kill the Michigan film industry: You may not have known that Michigan has a film industry, but it does. There are significant incentives, put out by the state government, to attract films to shoot in the Wolverine state. [...]
Hollywood producers have done an amazing job of suckering states into subsidizing their product. They claim that the money they spend goes into the economy in a myriad of ways, while ignoring the basic fact that ALL spending has a multiplication factor (money spent trickle down). So they convince the states to subsidize short term jobs instead of facing the real problem: American workers cannot compete with labor forces where workers earn pennies an hour. We need to ask ourselves if we can afford trade policies that result in a dearth of jobs that pay enough for families to live on. The IATSE isn't trying to destroy the Michigan industry, they're trying to make sure their members make enough to live on. Unlike Walmart, whose non union employees make your taxes go up because they need federal and state aid to pay for food, health care, and rent because their non union wages aren't enough to live on.
Great thoughts from "The Spartan."
There are quite a few of us conservatives still in the state. Now I question why my wife and I stay. Our daughter is 11 and we hate like heck to make her leave her friends and the school district she has attended exclusively.
My wife is an RN and with ObamaCare a possibility, she may look at leaving that career.
We own a production company in Mich, but are looking at folding it, packing it in, selling our house for whatever nickels and dimes we can get, and moving to a state with a less putative tax structure.
I have two projects on the table right now that would show the state in a positive light. One is a Motown Records themed story set in 1972. The other project is a sitcom featuring a funny, loving Conservative Christian family. Speaking of that show, it's amazing the odd looks and comments I get about trying to bring such a show into production. You apparently are allowed to show Conservative Christian characters only if they are hypocrites and preferable child abusers.
This article truly shows that all the start-up prod companies, the new movie studios being built are going to be for naught. The caterers and various local crew members who have had an opportunity to make a pretty good wage are going to find that taken from them in a heartbeat.
Our intent was always to shoot films in Michigan, close to home and featuring some of the truly amazing scenery the state offers. For now, our doors and attempts to film in Michigan will be a priority.
But priorities have a propensity to change thanks to taxes, job losses and the extraorindaryly high cost of running a small business in a business unfriendly state.
It saddens me. But reality has a way of doing that sometimes.
How many successful movies are made with non-SAG casts?? In fact, what's the most recent major release made with a non-SAG cast? I don't see that being a trend at all. American shows shot in Vancouver import their American/SAG principals, anyway. And the local actors are unionized. Even with the summer movies seeming to be devoid of the huge a-list stars of old, I don't think there's going to be a rash of hits made with inexperienced newbies with zero audience recognition,
Unions served their purpose YEARS ago by stopping unsafe working conditions, underage workers, etc. Since then they have only turned to monsters of greed and destroyed everything.
True, most all studio films are union. But if a film is shot in California under SAG jurisdiction it would include a good chunk of the extras and stand-ins as well. Depending on the size of the film, that could be several hundred people. When a union film is shot in Canada, only the main principles are American and SAG members. All of the extras, stand-ins and day players would be Canadian and the Canadian actors union (sorry I can't recall the name of it) at a much lower day rate than Americans would get under SAG rates. That is a situation that would affect people like me. I don't know the numbers, but it can save a production company a lot of money and sends work to Canada. You are right though: key actors would be household names and they'd be Americans. It's the smaller parts that affect the bottom feeders like me and Canada doesn't allow people like me to work in Canada.
…And the smallpox vaccine eradicated that nasty disease… or did it? Seems like it's made a comeback- the same way those unsafe conditions, slave wages, etc. will come back without someone to keep an eye on things.
Maybe the union isn't run by saints, but don't think the Mercedes driving elite are saints either.
As a below-the-line worker, and having seen the money-wasting, self indulgent jackassery capable by the above-the-liners, I am biased on the side of my fellow workers. At least I admit my bias, unlike Mr. DeMartini, whose hand-wringing on behalf of Michigan's Film industry is a poor smokescreen to conceal his desire to someday produce a film for zero cost.
All due respect, but are you regularly flown to Canada to act now? Neither am I (I'm an a.d.). I think you'll agree that since the writer's strike production has dropped like a rock all around. I think it's more below the line crew that's economical in Canada/Australia/Wherever, as opposed to cast–the leads take most of the cast budget anyway and everyone else is relegated their "scale + 10%" regardless of where you shoot. What the American film industry needs is for the value of the dollar to sink a bit more, making it cheaper to stay home in the first place.
Unions and dems seemed bent on killing Michigan , never mind the film industry. And the rest of the country is next.
indeed there are thinking people here in Michigan, but we're all on the West/Conservative side of the state. The voting blocks of Detroit and all the eastern towns are well controlled by the Dems and have been for a very long time. That last few elections, we've come close to wresting control away, and we have enough conservatives in the legislature to put up a good fight and even win on some issues, but unfortunately not enough. We almost got rid of our Canadian sent governor last time, but it didn't take.
and thanks to the democrats, there will be no more middle class. Only a whole lot of poor people and the elites who rule them.
I've had to prove MI residency on the Tax Incentive approved films I've worked on. As far as salaries are concerned for non resident stars, there is a cap to the amount of their salaries that can qualify for the rebate. Above the line and below the line cast and crew must also pay MI taxes. In my case, production had to pay my MI taxes to complete the requirements for the Tax Incentive. This may have been because of the time of year the production wrapped or the producers desire to get their hands on the rebate as soon as possible.
Maybe when you talk about subsidizing an industry, you should look at other industries that get 'tax breaks' or subsidies from the state. Or as another pointed out Obama and the Federal Government.
Of course, as soon as there was a call to close 2000+ Dealerships, in EVERY State in the USA, there was a lot of people saying, well, maybe this isn't such a good idea. Too bad for those folks in Michigan, but not in my backyard. Yea right, very nice.
As to the Unions… I agree to the general consensus commented on here to some degree. A bit overblown they are.
Well, well, well. I can see that this is a virtual brain trust of Hollywood "insiders". I can only assume from the comments that you all must be part of that elite 2% that owns the country. Now let's hear from the other side. As far as your $500,000 in increased rates goes, what you have conveniently forgotten is that with the rebate that drops the increased cost to $290,000. Now I understand that producers feel the need to make ALL the money, and God forbid that the crew should make an honest living. After all, aren't we just the middle class that you people seem hell bent on eliminating anyway? But let's be fair here. Tell me what is so wrong about making a middle class living while working hard and earning it? I'm sure that is what most of you are doing. Unions ruining Michigan? So far, the unions have provided thousands of jobs here for the film industry. And in case you missed it, this is an area that sorely needs it. So good for the unions! Contrary to what Mr. DeMartini would have you believe, nobody is getting raped here, no one is being taken advantage of. When any of you rocket scientists care to do what we do, 72 hours a week, for months at a time, come tell me we are overpaid. And as far as Frank's comment that the IATSE has decided that the film industry "must be stopped before it gets started", I guess that all the films and productions that are swarming to the state after the Aug. 1st, time frame must not have read Frank's column. While nothing quite as big as The Prince and Me 4 (shot in Thailand) or Crocodile 2: Death Swamp have come to Michigan yet, golly gee we can only hope. Unfortunately, for Mr. Dimartini, there is no slave labor here. So I guess we won't be seeing him. Our loss. As for the rest of you, remember that it was the unions that brought you safe working conditions and the weekend. So enjoy yourselves the next two days, it's on us.
I am a member of IATSE in MI. I do some work on motion picture in the state on occasion. I am also a delegate to the IATSE Intl Convention that begins on M 7/27/09 at the Dolphin Resort in Orlando. We would like for you or your representative to come and bend our ears. Your article is written from a producers point of view. Contact the MI delegation in Orlando. We will be happy to give you a more accurate portrayal of reality for your next article.
Yes, Yes, You rock!!!!!
Prancing down Rodeo, very good. I can just see it……good letter.
Your Pal, nameless drone magnus54000
Excellent points! On behalf of all us nameless drones that are trying to make a living while making even more for boombaclots like Frankie D., thanks!
Good for you. Of course you have to know that leeches like this don't have the guts to accept. Intelligent debate and discussion is not exactly the goal with this type. Maybe if Rush gets elected he can try for Secretary of Labor.
Congrats on what could be the most grammatically incorrect and over punctuated sentence that has ever been written.
I'm sorry to have to respond to this, but I must. The producers driving down Rodeo Drive are the people that give you your jobs. We are capitalists. We spend our money to employ you. If something in Michigan costs ten dollars and something in Louisiana costs eight dollars, guess where we are going to spend our money. The point my article was trying to make is that the state of Michigan tried to create and industry and it looked like it was working. However, when the union rate goes from 20.00 per hour to 24.00 per hour, it suddenly does not make sense to go to Michigan anymore when all of the infrastructure is in other states. If the union would have left the rates the same as Louisiana, all producers would have spent their own money in Michigan. Now, they will spend it somewhere else where they will get more bang for the buck.
If you invite me, I will come. Since you could easily find my list of lower budget credits, I'm sure you will be able to locate me at my office. I will give you a good lesson in the current economics of low budget film making. And, you will see that I am not living in a Beverly Hills mansion or driving a car on Rodeo Drive.
Per your example, 42% of $24.00 is still better then 25-30% of $20.00. And that is just the labor end. A 42% rebate on monies spent in the state is a pretty good deal, as evidenced by the amount of projects continuing to come here. But you are free to believe what you believe. Hope it works for you.
Another Great Obamanisim! Money comes to the State, Burn the Money with Unions, Print your own Money.
GREAT JOB! WE HAVEN'T SEEN ANYTHING YET, RIGHT MOLE FACE.
[...] Screen Actors Guild Does More Harm then Good by Frank DeMartini A few months ago I wrote a column about the effect IATSE’s wage increase in Michigan would have on future production in Michigan. [...]
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