LANSING – Carrie Jones, the new director of the Film Office, said this week that sharp criticism about the state’s film credits hasn’t dampened her excitement about using the film industry to diversify and improve Michigan’s economy. Jones said she plans to keep the momentum in the growing industry going by working with the foundation laid by her predecessor Janet Lockwood, who ran the office for nearly two decades.
At the film office since February as deputy director, her prior experience includes eight years working in Governor Jennifer Granholm’s political office, fundraising, serving as the campaign finance director and running the governor’s political action committee, among other duties.
“It’s humbling and a great opportunity to be part of something great happening in Michigan,” said Jones, 34, who began a two-year contract in July to replace Lockwood, film office director since 1992 and one of the key players in the adoption in 2008 of the polarizing film tax incentives. “I would like to keep the program rolling and make sure it’s strong and competitive.”
Jones takes the helm of the Film Office at a time of jubilation and fury about the film credit. Although the credit has spawned waves of favorable publicity when stars visit the state for television and film shoots, especially seen with the premiere this week of the ABC police drama “Detroit 1-8-7,” the credit also has come under heavy criticism. One man has been charged with trying to defraud the state on an allegedly fake studio deal near Grand Rapids while a Senate Fiscal Agency report recently said the credits were a money-loser for state government.
Jones touts the success of the film credits as having transformed “the baby film industry” present in Michigan before the incentives were enacted into a burgeoning jobs creator that could one day compete with areas such as Vancouver, British Columbia, which has become a filmmaking hub and alternative to Hollywood, in part due to aggressive incentives.
Prior to the incentives, which offer a refundable tax credit up to 42 percent, the state’s film industry was about $2 million a year, compared to the projected $300 million it will generate next year, she said.
One of the current projects getting massive attention is the television show “Detroit 1-8-7,” which premiered on ABC Tuesday night. The show, which stars Michael Imperioli of “Sopranos” fame, has brought in $25 million and 200 jobs, according to the Detroit Free Press. The show is the first series ever set in Detroit.
Partially filmed in an old auto parts warehouse in Highland Park, Jones said “Detroit 1-8-7” is a perfect example of how the tax credit is helping Michigan recover from a dwindling manufacturing-based economy.
“It is one of the most symbolic and literal views of the old industry transformed into new,” she said.
As for criticism that the jobs created by the incentives aren’t as valuable because many are part-time or temporary, Jones said residents need to “adjust our thinking paradigm,” when it comes to what constitutes a secure and good paying job.
She said it will likely take time for Michigan leaders to become more acquainted with the film industry and stop gauging hiring success on full-time positions because many key people such as caterers or production assistants might only work for six months a year, but earn a high enough wage to pay their expenses for the entire year.
On smaller productions, the lowest-paid person makes about $17 per hour and on larger projects, that number increases to $27 per hour, plus $101 a day in benefits, according to Film Office Advisory Council meeting notes.
Jones added that the thousands of jobs that have been created because of the tax break are just the beginning. Once the state is home to more sound stages and other filming infrastructure, the industry will be more deeply rooted in Michigan, meaning fewer profits will go for outsourced post-production and other work.
Her vision is that the same infrastructure would also eventually make the credits less necessary to attract new projects, making it possible to lower the generous credit percentage or get rid of the refundable credits altogether.
One can see how the industry becomes sustainable without competitive incentives by again comparing Michigan to Vancouver, Jones said. Though filmmakers were initially drawn to the location because of incentives combined with the strong performance of the dollar in Canada, even now when their money doesn’t go as far, they continue to shoot in Vancouver because of the convenience of having a solid industry base, she said.
Along with arguments that the tax credits are bleeding money, the film office faces mounting complaints about a lack of transparency, including from Sen. Nancy Cassis (R-Novi), chair of the Senate Finance Committee and sponsor of three bills that would impose tougher reporting requirements of the Film Office.
Cassis, who said the “level of transparency is far from optimal” at the office, has said Jones and others in the administration wrongly hide behind tax law in refusing to disclose important information.
That failure to release information has been starkly apparent in the recent Hangar42 controversy, in which a man allegedly tried to defraud the state by claiming he purchased a Grand Rapids studio for $40 million (four times the listed value) and that he was eligible for a 25 percent or $10 million credit as a result. At the time, the Film Office refused to say whether it had granted or denied a tax break to the man’s company, citing tax law. It was only when Rep. Robert Dean (D-Grand Rapids) told Gongwer News Service that the Film Office had rejected the application that the result was known.
Jones said she didn’t release specific documentation about why that application was denied because she “is bound by the law as it is written and we acted based on the counsel of our liaison in the Attorney General’s office that we not disclose information on the application for Hangar42.”
The language of the revenue act, by which the office is bound, is as follows: “Except as otherwise provided in this subdivision or in subsection, an employee, authorized representative, or former employee shall not divulge any facts or information obtained in connection with the administration of a tax or information or parameters that would enable a person to ascertain the audit selection or processing criteria of the department for a tax administered by the department,” said Terry Stanton, spokesperson with the Department of Treasury, which jointly oversees applications for the credit.
“An employee or authorized representative shall not willfully inspect any return or information contained in a return unless it is appropriate for the proper administration of a tax law administered under this act. A person may disclose information described in this subdivision if the disclosure is required for the proper administration of a tax law administered under this act or the general property tax act, pursuant to a judicial order sought by an agency charged with the duty of enforcing or investigating support obligations.”
Jones said although the Hangar42 situation rightly angered people, many forget that the state wasn’t defrauded because of the Film Office’s strict adherence to rules.
“With all the controversy surrounding Hangar42, it often gets lost that we have a process and the process worked, which is a testament to the scrutiny that goes into every application we receive,” she said.
While the Film Office did reject the application, months prior to that decision, Granholm touted the Hangar42 project in her State of the State address as one of many examples where her economic development policies had paid dividends.
Though Cassis complained at a committee meeting this week about the lack of an audit by the auditor general of the incent
