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May 16, 2011 - Image 4

Resource type:
Michigan Daily Summer Weekly, 2011-05-16

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Monday, May 16, 2011
The Michigan Daily - michigandaily.com

Thinki baby, thinky

Edited and managed by students at
the University of Michigan since 1890.
420 Maynard St.
Ann Arbor, MI 48109




Unsigned editorials reflect the official position of the Daily's editorial board.
All other signed articles and illustrations represent solely theviews of their authors.
Gi ve mea(tax) break
Film industry incentives must be maintained
n Thursday, a new bill was introduced in the Michigan
Senate that may save the state's film industry from Gov.
Rick Snyder's proposed budget cuts. Senate Bill No.
383, proposed by State Senators Mike Kowall (R-White Lake
Township) and Virgil Smith (D-Detroit), will preserve the film
credits that the Michigan Film Tax Incentives have provided
to filmmakers since 2008. This proposed bill could reverse one
of the many mistakes in Snyder's latest budgetary cuts, and the
Michigan Senate should pass it.

The absurdity of recent political
grandstanding in response to high
gasoline prices is quickly reaching
cosmic proportions, which tends to
happen when the collective thought
of our nation's representatives
struggles to fill a thimble. But what
an apt amount of cerebral activ-
ity it was! The legislation jammed
through the House of Representa-
tives by the Republican majority
over the past two weeks - legisla-
tion that not only reverses President
Obama's offshore drilling morato-
rium, but also calls for an expan-
sion of drilling into certain federal
waters - will amount to a thimble-
sized contribution of oil to our mas-
sive energy demand.
Apart from being completely
useless, the legislation also, holds
the distinction of having the most
puerile name in recent memory. It
consists of three bills titled "Put-
ting the Gulf of Mexico Back to
Work Act," "Restarting American
Offshore Leasing Now Act" and
"Reversing President Obama's Off-
shore Moratorium Act." Linguistic
concerns aside, the bills basically
serve to reopen the Gulf of Mexico
and other areas, such as the Atlantic
off the coast of Virginia, to oil drill-
ing. Proponents of these bills (most-
ly Republicans) cheerfully contend
that greater domestic production
will lower gas prices and decrease
our dependence on foreign oil.
Such a bold side-stepping of reali-
ty is nearly on par with the "theory"
of creationism and other infantile
beliefs. It conveniently ignores the
fact that oil is traded on a global
market. There is no chance of the
United States producing enough
oil to significantly shift the price of
a barrel and thus reduce gasoline
costs. And the notion that we can
reduce our dependence on foreign
oil by producing more at home is
equally ridiculous - the rnath just
doesn't work. According to the U.S.
Energy Information Agency, we
used just under seven billion barrels
of oil last year. The total amount .
of proven offshore reserves as of
2009 is a little over four billion bar-
rels, according to the same agency.
Even otr onshore reserves are scant
- a little over 16 billion barrels. In
case your intelligence has yet to be
insulted, the waters i n Virginia that
the legislation would lmake avail-
able for exploitation would yield a
six-day supply of oil, according to
the Departmentofsthe interior.

If it were just Republicans pan-
dering to the public's distaste over
the price of gas, there wouldn't be
much to worry about. Yet on Satur-
day, President Obama committed
another environmental blunder.
Even after acknowledging that
"there are no quick fixes to the
problem" of $4-a-gallon gasoline,
Obama went on to endorse drill-
ing in Alaska's National Petroleum
Reserve, "speed[ing] up the evalu-
ation of oil and gas resources in
the mid and south Atlantic" and
opening up the Gulf of Mexico to
new drilling leases, according to
his most recent YouTube address.
These steps supposedly "make
good sense." These steps actu-
ally contradict the administra-
tion's previous policies and make
absolutely no sense. Not only is
there much less oil than previously
thought in the National Petroleum
Reserve- (a 2010 estimate by the
United States Geological Survey
put the figure at a little under a
billion barrels), there is no extant
technologytoremediate an oil spill
in the arctic environment.
What are we to do in the face of
this blatant anti-intellectualism
and political gamesmanship? We
need to do something distinctly
un-American: We need to think.
According to an April CNN poll,
69% of Americans support the
expansion of offshore drilling. Con-
ceivably, this only gave more weight
to the irrational bills proposed by
members of the House of Repre-
sentatives and exerted more pres-
sure on President Obama to reverse
his previously sensible policies. It
is an irony of a supreme order that
the age of information in America
became the age of unreason. Simple
soundbites in the media, such as
"Drill, baby, drill!", influence mil-
lions. The sensationalistic accounts
of "Climategate" gave ammunition
to politicians and pundits and actu-
ally reversed a growing belief in
anthropogenic climate change in
this country. So let us be on guard
from letting our representatives
makesenseless and unscientific
decisions on our behalf. Let us be on
guard from refusing to think. There
was a time when the expression
"Only in America" conveyed a sense
of wonder and hope. Tdy it's a
euphemism for irrationanlity.
Will Grundler is a senior
editorial page editor.


According to a May 14 article
in the Detroit Free Press, the
new bill attenpts to adjust the
incentive program, replacing a
standard grant with an adjust-
able sliding scale. Currently,
the Michigan state government
guarantees filmmakers a flat tax
credit of 42-percent for their
production expenditures. By
using a sliding scale to grant tax
incentives, this new bill allows
the state to evaluate how much
revenue and how many jobs each
film project will bring in and
grant tax credits accordingly.
Though the bill does place lim-
its on the film industry, the cap
is much more reasonable than
Snyder's proposed limits. His
new budget plan puts a $25-mil-
lion limit on spending for the tax
credits, whichi tin' film industry
argues will drastically cut filn-n
ing in ine st . 'While tnyder
argues that this)reduction in 1ilm1
spending simply "levels the play-
ing field," in reality, these cuts

have the potential to destroy the
industry's presence in the state,
which would result in a substan-
tial financial blow to Michigan.
Though there has been signifi-
cant growth in the three years
since the inception of this pro-
gram, the state's film industry
is not established enough to
maintain the same level of busi-
ness without the tax incentives.
Michigan doesn't have the infra-
structure of Hollywood, and
without the economic advan-
tages, filrn businesses will leave
the state.
Since the beginning of the
program, Michigan has host-
ed more than 135 productions
and generated more than $649
million dollars, translating to
the creation of nearly 4,)00
jobs within the state. It's clear
that the tax incentive brought
an unprecedented amount of
business to Michigan since its
inception. What isn't clear is
how the state will make up for

the lost revenue under Snyder's
cuts. According to the May 12
Detroit Free Press article, "Oz:
The Great and Powerful" will
start filming in August and will
generate an estimated $105 mil-
lion for the state and employ 257
state residents.
Snyder's proposed cuts to the
film tax credits directly conflict
with his goals of making Michi-
gan a loss-tax environment that
welcomes businesses. On March
28, the state House approved a
$1.7 billion tax cut - a move Sny-
der called critical to Michigan's
economic reinvention. If Snyder
plans to import business to the
state through tax breaks, it's
illogical for him to cut the film
if the state Senate wants to
boost Michigan's econonn, Sen-
ate Bill No. 383 should e passed.
The fhn nidustry has proved to
ie a vitA player in the reinven-
tion of M ichigaiin and its econoin-
ic potential shouldn't be stifled.


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