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Michigan Lawmakers, Industry Executives Debate Film Incentive Program

ROBERT SIEGEL, HOST:

If you want to lure Hollywood to your state, you need to provide an incentive - a financial incentive. Thirty-seven states offer a financial incentive of one kind or another, but as NPR's Jason Margolis reports, some states, like Michigan, are questioning whether it's worth it.

JASON MARGOLIS, BYLINE: In 2008, Michigan was on its back. Chrysler and GM were dying; unemployment was the highest in the nation. Then Clint Eastwood rolled into town to film "Gran Torino."

(SOUNDBITE OF FILM, "GRAN TORINO")

CORY HARDRICT: (As Duke) What you looking at old man?

CLINT EASTWOOD: (As Walt Kowalski) Ever notice how you come across somebody once in a while you shouldn't have messed with? That's me.

HARDRICT: (As Duke) Man, you crazy man. Get out of here, man.

JIM BURNSTEIN: I remember being in the theater and then people sit through the end where it says Made in Michigan, and the audience burst out into applause. And I - it brought tears to my eyes.

MARGOLIS: Jim Burnstein directs the screenwriting program at the University of Michigan. He helped get the state's film and TV incentive program passed with near unanimous support in 2008. The state offered Hollywood the most generous tax credits in the nation. They were called tax credits, but Hollywood studios don't actually pay that much in state taxes, so Michigan taxpayers were really providing direct subsidies. For every dollar they spent in the state, they got back up to 42 cents. Hollywood liked that.

BURNSTEIN: You could walk out and you could see Clooney, Ryan Gosling, Pierce Brosnan...

MARGOLIS: The idea was to stimulate spending. Two years after the bill passed, nearly $300 million in film and TV money was sloshing around Michigan. Restaurants and hotels loved it. Taxpayers paid a high price though - $115 million. A year later in 2011, state lawmakers said that's too much. The credit is now capped at $50 million a year. This March, the Republican-led state House voted to scrap the program entirely. Jarrett Skorup is with the Mackinac Center for Public Policy, a free-market think tank in Michigan. He says film incentives have devolved into a race to the bottom - which state can pay Hollywood the most?

JARRETT SKORUP: In Michigan, a lot of the money goes to out-of-state producers who come in, film and then leave and then, of course, can go somewhere else the next time they make a film.

MARGOLIS: Skorup and some conservative lawmakers in Michigan point to a damning statistic.

SKORUP: The Michigan Film Office actually found last - in their latest report that there were no total full-time jobs created from the program.

MARGOLIS: But many in the industry say that's a misleading figure. Eddie Rubin is a film and TV producer based near Detroit. He hires a lot of people just for a few days, weeks or months at a time.

EDDIE RUBIN: We are hiring carpenters, lighting technicians, all different types of skilled work.

MARGOLIS: Rubin graduated from the University of Michigan in 2009 when film incentives were going full throttle and chose to build his career here. Now, he says, even the threat of eliminating incentives is hurting the local industry.

RUBIN: Films are afraid to come here because they're afraid that it's going to be pulled out at any minute. There's not going to be a program. They come here, they set up and it's not there anymore.

MARGOLIS: Jim Burnstein at the University of Michigan hates hearing talk like this.

BURNSTEIN: We're exporting talented people who are already skilled with these jobs, and we're sending them to pay taxes in other states. Why do we want to do that?

MARGOLIS: His opponents counter - what makes his industry so special to get government assistance? Of course, Hollywood loves a good ending. Shooting recently wrapped in Detroit on the blockbuster "Batman Versus Superman." It comes out next year. If it's a hit, there will be a sequel and Batman will surely want some incentives to come back to Michigan. Jason Margolis, NPR News, Ann Arbor. Transcript provided by NPR, Copyright NPR.