Charging fees on entertainment activities at downtown venues could unlock more benefits for Detroit’s neighborhoods. 

That’s the pitch from Council Member Angela Whitfield-Calloway, who spearheaded a request this month for the Michigan Legislature to allow Detroit implement an “amusement tax” on entertainment services. Days later, football fans blitzed Detroit to watch the Lions host an unprecedented second NFL playoff game at Ford Field. Amusement tax proponents say much of that economic activity stayed downtown. 

“With all the things happening in our city, people are coming in from all over the world,” Whitfield-Calloway said. “We want to make sure everyone who supports our venues are safe, we’re able to clean up after everything is over. The Lions are winning, we have the NFL Draft coming … We have to make sure we can provide that level of service.” 

The price of a Lions season ticket will increase by an average of 30%, according to reporting from Detroit Free Press. Price hikes don’t create any new revenue for the city, but they could. 

Reports from the Citizens Research Council of Michigan show entertainment taxes are widespread among states and major cities across the country. Previous attempts to authorize taxes on sports and entertainment tickets in Michigan failed. 

“You have to put it in the context of three decades of Republican control of the Legislature,” said Eric Lupher, president of the nonpartisan Citizens Research Council. “There has just been high-level resistance to authorizing local governments to levy any sort of new tax.”

It’s unclear whether the idea will be more popular among Democrats, who had majority control of both chambers of the Legislature before two House members left for mayoral seats at the end of 2023. 

Whitfield-Calloway said she’s working with state Sen. Sylvia Santana, D-Detroit, and Sen. Mallory McMorrow, D-Royal Oak, to craft legislation this year. Santana introduced bills in 2017 and 2019 but neither attempt advanced far enough to be voted on. 

McMorrow said she’s working on a proposal that isn’t exclusive to Detroit. She said communities across the state could be persuaded to see the benefit of new revenue. 

Michigan collected $285 million in sales taxes from amusement activities, according to 2022 U.S. Census data. Pennsylvania, which charges a 5% statewide tax on admission for concerts, movies, sports and other events, collected $1.7 billion. 

An amusement tax also could add costs for Detroiters who already struggle to afford tickets to events. Federal data also shows people who are far wealthier than the average Detroiter make up the bulk of entertainment spending.

People earning more than $100,000 comprise 71% of the national spending on entertainment fees and admissions. More than a third (35%) of the spending is by people earning more than $200,000. 

Michigan and Detroit are outliers – more than half of states and several major cities like Chicago, Las Vegans, Cleveland, Portland, Houston and New York have some form of amusement tax. Chicago’s 9% tax raised $232 million for the city in 2022. 

“Start looking at our neighbors,” Lupher said. “Ohio. Illinois. Indiana. They’ve all done this.”

Mayor Mike Duggan said “I don’t have any problem” with an amusement tax, but he’s pushing the Legislature to focus on another tax proposal that would change how property taxes are calculated. 

Santana couldn’t be reached for comment, but McMorrow talked with BridgeDetroit about what an amusement tax could mean for Michigan. 

Editor’s note: This transcript has been lightly edited for length and clarity 

BridgeDetroit: How seriously should we be taking this? Past proposals have fallen flat in Lansing. What’s different this time? 

McMorrow: The difference, No. 1, is I’m the chair of the Senate Economic Development Committee. There’s been a number of things that have come up that have benefited other areas of the state, entertainment and hotel taxes for Kent County, and we’ve seen very little to benefit Detroit. 

That’s the argument that I want to make. We’ve got to put up something that works for everybody. If we do this right, with enacting legislation that could potentially benefit other areas of the state, there’s no reason why we shouldn’t pick it up this time.

BridgeDetroit: So are you looking at something that other communities could opt-into and isn’t specific to Detroit? 

McMorrow: Something that I’ve learned throughout this process is it’s always a challenge of getting something to become a priority for members from all around the state. If we can create it in such a way where other regions or cities can take a look at it and adopt it themselves, then we’ve got a better chance of getting a full floor vote.

BridgeDetroit: When it comes to an amusement tax, what does that mean? Past proposals have included everything from zoos to professional sports. A lot of cities in Michigan have minor league baseball teams and smaller event venues. What’s the scope of this? 

McMorrow: We’re not that far yet. We’re in the earliest days. I told (Whitfield-Calloway) that I’d love to work on it. I am going to solicit feedback from all of my colleagues to have those conversations. Is it zoos or museums or minor league baseball teams? What’s the scale, what’s the size to make sure that this is something that the majority of the Legislature is interested in at least taking a look at?

BridgeDetroit: Is this a bill you plan to introduce in 2024? 

McMorrow: Probably too soon to put a timeline on it. It depends on how simple or complicated we make it. 

BridgeDetroit: Where has past resistance come from?

McMorrow: There’s that perception that Michigan is opposed to taxes and revenue, but when you look at the local level we’re a state that loves millages. They pass overwhelmingly in pretty much every community. 

I saw this last term with a number of bills that would have benefited Detroit that it’s just deprioritized. When we had most of the Legislative leadership come from outstate Michigan, that’s what was put up. One of the opportunities of us having a much larger Detroit caucus now is that there are more of us who can advocate for making these things a priority.

BridgeDetroit: Michigan and Detroit stand out among other states and major cities for not having something like this already.

McMorrow: We are one the few that doesn’t have an entertainment tax. The fact that all the major sports teams have moved back into the city, now is the time to do it. It’s a very different time than it was back during the bankruptcy. There’s been a lot of energy and investment and emphasis on remaking Detroit and creating a sports and entertainment complex in the city. It’s time that the city and the residents can benefit from that.

BridgeDetroit: There’s an ongoing conversation about rethinking how the growth of the arena district is equitable and benefits the public. Does that add momentum to this latest effort? 

McMorrow: This has been the thread of a conversation I’ve been trying to have in my committee. In a lot of my Strategic Outreach and Attraction Reserve (SOAR) reform legislation, we changed the idea of community benefits agreements on its head, which is something a lot of these major projects in Detroit rely heavily on. That doesn’t get equally distributed everywhere. It also isn’t necessarily the most democratic way to decide which areas benefit versus the tax base, which is revenue for the city, and local elected members of the City Council can decide how those funds get spent. 

Hopefully it gets spent in a way where it doesn’t require advocates being in the room to agree on the community benefits agreement, (funding) is going to every neighborhood. Everybody should benefit from the success, even if it’s anchored in downtown.

BridgeDetroit: We’ve also heard an infrastructure-based argument that the mass of people coming into Detroit for large events are driving on local roads and taking up (public safety) resources, so there should be more money collected to pay up for that. 

McMorrow: I’d be interested to kind of see some of the data that backs up. How much of that is kind of taking away services from others? Can we just ensure there’s enough revenue to make sure we’re adding to what the community and the residents and the neighborhoods need to be able to accommodate events.

BridgeDetroit: There’s concern about added fees pricing people out. Things that go on in the arena district are not seen as affordable for the average Detroiter. Is there a way to do this that doesn’t make it more difficult for people who live in the cities that host these events to participate in them too? 

McMorrow: It’s about finding the right balance. I think we want to make sure it’s not a large enough addition to price people out, especially people who are local. Oftentimes it’s not necessarily the price of the ticket, it’s the price of parking. We have some of the most expensive parking on surface lots compared to other cities. 

It’s going to be down to the details of where an entertainment tax could be added. Is it the ticket, is it parking, concessions – there’s ways to do it, where you’re being sensitive to making sure that everybody can have access to the events. We’re thinking about the area where you are really hitting people who have that expendable income or are coming in from other places, and not pricing people out?