Hollywood's latest disaster story

The state's film incentive package, combined with a business depreciation allowance in the federal economic stimulus package and continuing economic woes have opened a massive hole in the state's budget.

All in all, state revenues declined by $472.3 million, officials with the state budget office said. The subscription-only Gongwer News Service estimated the amount the budget would have to be adjusted at $300 to 400 million.

Now what?

Well, a decline in school aid fund revenue means the proposed increase for schools is mostly, if not completely off the table. And we'll have to wait and see what program cuts make up the budget, because you know there's positively zero appetite for tax hikes.

So now we sit and wait to see if the film package, which so far has brought in a few lower-budget films starring such A-listers as Haylie Duff (Hilary's older sister), can pay off - both by increasing jobs and in additional tax revenues from on and off-set expenditures.

In the words of Clint Eastwood, whose Dirty Harry remake may or may not film here: Do you feel lucky punk? Well, do you?

Comments

[Jim Livingston]

Our budget shortfall is not due to giving tax breaks to industries, it is due to the massive tax increases imposed on Michigan families and businesses that has created this shortage of revenue. In order to stimulate economic growth the legislature should have reduced taxes but the majority does not seem to comprehend the basics of economics. They have put a stake in the heart of our citizens and only major changes this November will enable the state to right itself. What needs to be done is to repeal the tax increases and put an emphasis on responsible budgeting and spending.

Legislators such as Simpson & Byrum claim to be business owners but they seem to have no clue as to what makes an economy tick. In fact, Simpson should know better since he has owned his business for some time. I am not sure if Byrum even owns her business, since her fathers name and signature are on every annual report for their hardware store. This information was very easy to find, makes me wonder why the media has not brought this up before. Maybe its time to expose this fruad.

Either way, Byrum should have an easy go this election but I hear that Simpson has a very strong Opponent. Never heard of Byrum's opponont before.

[Kerri]

Jim Livingston's comment is right on! Gov. Granholm has cancelled jobs, programs and projects since day 1. She's overspent, and given union businesses (like GM) several bail outs, and tax-free incentives to build, etc. Democrats have never had a clue as to what basic economics are. She continues to blame Michigan's woes on everything and everyone, without taking repsonsiblity for the bad choices and decisions she's made, on Michigan's behalf.We hope the people of Michigan (particularly the ones that voted for Granholm) have seen enough of her lack of leadership, come November.

[Economic Realist]

Jim Livingston's comment goes against logic. Give more tax benefits away to industry and collect less from all other sources, and you will get more money in the state.

There are cases where lower taxes stimulate more activity, but often people quote the Laffer Curve. However, the Laffer curve only works when taxes are very high, with most economist guessing between 65-80% for the rate (far below Michigan's rate).

It's been the policies of free trade that disregard worker's rights, environmetal considerations, and willingness to send jobs to nations such as Communist China and Vietnam that do not allow for freedom of spech, workers, or entrepeneurialism to grow.

The neoconservaitve economic plan has required heavy debt, both on the personal and national scale. We've had to borrow from China, who continues to get our productive jobs, and instead switch to "service" jobs, which pay less and lower our quality of life.

The national downturning economy and money lost of property taxes has contibuted, as well the Hollywood tax incentives may have (we have to see whether that may pay off by developing sustained industry).

[JRS]

The Hollywood tax break, yeah thats the ticket for solving Michigans economic problems.

Someone came to the governor with
this idea and she got stars in her
eyes "ooh Hollywood cool..." and
sold her on this bill of goods.

Hollywood seems glamourous and interesting compared to other dull stimulus plans so
the state fell for it. Get Mitch Albom and Jeff Daniels in a room
talking about it and people are going to be impressed.