A 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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