As noted below, it is lunacy for the Michigan Economic Development Corporation to rain $40 million of taxpayer cash on Walt Disney Studios. This "bargain" is costing the taxpayers over $155K for each job that Disney projects will be created by its production of the film Oz here in Michigan. This doesn't include all of the other tax subsidies, credits, and breaks -- up to $120 million -- showered upon Raleigh Michigan Studios, which is being built in Pontiac for the production of the Disney film.
The government using taxpayer dollars to pick winners and losers instead of the marketplace is a dubious proposition at best. But even an advocate of this sort of policy can see that the Michigan film tax credit is Loony Tunes. The public cost has no bearing whatsoever to the public interest. Compare the largesse Disney and Raleigh are receiving to other tax deals the state his given to companies establishing a permanent facility and jobs in Michigan. This highlights the bureaucratic insanity of welfare for film-makers.
Example #2: Summit Health Inc., a provider of wellness programs, is investing $11.4 million to build a research and development center in Novi. This is life-sciency, so fits with the bureaucrats' fancy of the day like alternative energy does. Nevertheless, permanent jobs will result. Summit projects 252 of them in exchange for a $514,000 state tax credit. That's a taxpayer cost of $2,040 per job.
Example #3: Tianhai Electric North America Inc. is a Chicom outfit in the business of automotive wire harness systems. They're probably here to steal whatever technology they can from us, but the Reds promise us a $5 million investment in a new facility in Orion Township and 202 new warehouse and distribution jobs. The state is ponying up $300,000 in tax breaks for this. That's a taxpayer cost of $1,485 per job.
As covered in the River City Zek post, all of these job numbers are puffery and should be discounted accordingly. Nevertheless, the comparison of film-making fantasy to the real world starkly shows the absurdity, indeed stupidity, of throwing away taxpayer dollars on Hollywood hustlers who shoot on location only where the hand-outs are most generous. (In fact, the Hangar42 Studios scandal reveals the serious prospect of corruption when it comes to dispensing big loot like the film-making tax credit.) And once the shoot is finished, the local spending is also finished. All that's left is for the state to cut the film-maker a fat check. Meanwhile, real companies creating real jobs usually cost the taxpayers next to nothing in tax breaks.
Most of the jobs created by Disney's production of Oz will be gone once Disney is gone. Whatever jobs remain depend upon the establishment of an ongoing film industry using facilities like Raleigh Michigan Studios. But as seen here, Raleigh Michigan Studios needs $20 million up front in taxpayer dollars to get started and wants another $100 million in tax credits to keep going. And that all goes up in smoke if the state stops pay film-makers to come to Michigan. Film-makers go where the local government gives them the best deal. That's the game, and a very expensive one for Michigan taxpayers -- even with Guv Rick's $25 million annual cap on the hand-out.