Rumor: 'Oz' movie cost taxpayers nearly $40M

Michigan shelled out nearly 40 million in tax dollars toward the film.

CONFIRMED: Michigan paid nearly $40 million in incentives, angering critics and pleasing boosters

Deadline Detroit, Michigan Capitol Confidential, Daily Caller and Reason.com are buzzing about this confirmed fact: Michigan shelled out nearly 40 million in tax dollars from the cash-strapped state’s coffers toward the filming in Pontiac, Mich., of Disney’s big-budget movie “Oz the Great and Powerful.”

“Michigan residents should be seeing the film for free,” Jarrett Skorup, a research associate with the conservative Mackinac Center for Public Policy, wrote in his Michigan Capitol Confidential article. Its headline basically sums up his reasoning: “Michigan taxpayers already paid for ‘Oz’: Film costs state taxpayers almost $9 each.”

Critics say the money paid to get “Oz” filmed in the state wasn't a good deal for Michigan.

“For Michigan businesses to pay $40 million, they had to lay off or not hire a lot of people,” Republican state Rep. Tom McMillin told Michigan Capitol Confidential for another article. “I don't like that it went out of the state and continued to enrich millionaires and billionaires with government subsidies."

What’s the deal?

What we found: Yes, Michigan’s film office contributed $39.76 million toward “Oz,” according to a 2010 annual report (see page 34 of the 36-page PDF). Meanwhile, the report says the project was expected to spur $104.8 million in new spending in Michigan. How that pencils out in real life is unclear. According to Michigan Capitol Confidential, “the Michigan Senate Fiscal Agency found that even among the most optimistic of assumptions, the film program brought the state only $0.11 per dollar spent” for all subsidized films in the 2010-11 fiscal year. “The subsidies cost Michigan taxpayers $125 million and returned $13.5 million.”

Such incentives aren’t new, or unique. About $1.5 billion in tax breaks flows from states to the film industry each year nationally, according to a state-by-state survey by The New York Times that is mentioned in this article, which points out the troubles Michigan has had in its campaign to become a center for filmmaking.

Linden Nelson of Michigan Motion Picture Studios seems to view it optimistically, telling the Detroit Free Press that "Oz" provides an argument for putting more money behind the state's film incentives because it brought creative work to hard-hit Michigan. "This is what this industry was supposed to bring to Michigan," he said of the overall impact of "Oz."

“This is by far the largest project that has filmed in Michigan, and they were here in Michigan for more than a year,” Michelle Begnoche, spokeswoman for the Michigan Economic Development Corp., told MSN News via email.Last week Disney did a screening of ‘Oz’ for cast and crew in Michigan in advance of the national release, which was the largest local screening of that kind Disney has ever done. This film has certainly created a great deal of buzz here in Michigan and about Michigan, with many of the stars talking about their experiences here in the state.”

Full coverage of "Oz"

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