By DAN LOYD, Staff Writer
Fighting robots will once again fill the skies of Michigan. The Michigan Film Office recently announced that Michael Bay’s newest installment of the Transformers series has received a $20 million tax incentive to film in Michigan.
Transformers 4 will be the third in the series to use a Michigan backdrop. The first Transformers film, released in 2007, and Transformers: Dark of the Moon, released in 2011, were both filmed in metro Detroit. A press release on the Film Office’s website said the production is expected to spend nearly $82 million in-state and create 368 Michigan jobs.
“This project will shine another bright spotlight on Michigan and provide tremendous opportunities for our cast, crew and support services,” said Margaret O’Riley, director of the Michigan Film Office.
The effectiveness of the film incentives has been debated since Governor Jennifer Granholm introduced the film incentive program in 2008 as a way to tap into the 50 billion dollar a year industry. When Governor Rick Snyder took the office over in 2010 he capped film incentives to $25 million a year in favor of across the board tax cuts for business citing the inconsistency of the film industry.
“Using the basic spending multiplier that students learn in Econ 201 we can get a rough estimate of the impact of having 368 new Michigan jobs,” said University of Michigan-Dearborn professor of economics Bruce Pietrykowski. “Those 368 newly employed Michigan workers, assuming that they spend about 85 cents of every dollar they earn, would need to earn about $33,500 on average to generate $82 million dollars in total spending.”
Professor Pietrykowski pointed out that many of the jobs created by Optimus Prime and the Autobots will only be temporary. He said the key to enduring benefits from film incentives lies in long term investments.
“Some of the spending on this film may require fixed investment in Michigan and that’s where Michigan’s long-term growth is supported,” he said. “However, the Governor’s office has slashed subsidies for the film industry and that has reduced fixed investment in film-related plant and equipment.”