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Michigan governor touts film tax credit program amid criticism

October 8, 2010 |  5:20 pm

Michigan has become a Hollywood favorite -- and the state's governor wants to keep it that way.

In an apparent effort to bolster a program that has recently drawn some harsh scrutiny, Gov. Jennifer Granholm on Friday renewed her support for film tax breaks that were enacted in 2008. Michigan offers filmmakers a tax credit of up to 42% on qualified production expenses, the most generous incentive of its kind in the country.

"We are watching an entire new industry emerge in Michigan,'' Granholm said at an event hosted by a film industry group. "The number of productions being filmed in Michigan is increasing, we are creating jobs and attracting production facilities, and we are keeping our young people here in Michigan."

Granholm's comments come in the wake of a critical report from the state's Senate Fiscal Agency that concluded that the tax credit program was paying out more in credits than it was taking in, and raised questions about its overall impact on the state's economy.

The program's effectiveness has become a political hot potato. Granholm, a Democrat, views the industry as a key growth driver for Michigan's depressed economy, but Republican gubernatorial candidate Rick Snyder has questioned the viability of the film tax breaks in light of the state's budget crisis.

Granholm noted that the film incentive has attracted a wide range of productions to Michigan, including the new ABC series "Detroit 1-8-7" and such movies as "Transformers III" and "30 Minutes or Less." This year, 38 projects have wrapped in Michigan and eight others are underway. The productions are expected to generate $300 million in spending this year.

"The incentives have provided important economic benefits for the state, while also helping to diversify our economy," Granholm said.

-- Richard Verrier