Reactions are still emerging from the release of Michigan Governor Rick Snyder's budget proposal last week. I commented on my first impressions late last week and am now following up on a more detail look into some of the more controversial aspects of the budget.
From my morning overview of Michigan news sources, it appears that much of the budget discussion today focused on the state's film industry incentives program. Mitch Albom writes that Snyder's proposal to scale back the nation's most generous film tax incentives felt like getting "punched in the stomach."
I understand the allure of the film industry and the magic of movies. I wrote about it on the blog last fall (parts I, II, III, & IV). The film incentive program is very popular and there is a lot of anecdotal evidence that shows that it has been successful. Still, the overall evidence on the success of the program is mixed. A recent Earnst & Young study states that every $1 spent on the program generates $6 in state economic activity which contradicts the 2010 Senate Fiscal Agency report from last fall that found that the program will never "pay for itself."
The problem with Albom's criticism is that it is written like kid in a tantrum who's had a new toy taken away: "Snyder acts as if the world consists of one type of business -- a type that only wants low state taxes. He's wrong."