Los Angeles, and California as a whole, is facing stiff competition from other states and even countries in the form of huge tax breaks and other incentives if Hollywood execs choose to shoot their big budget movies elsewhere.
This was refelcted reflected by the numbers of colorful booths at the recent film locations show held at the Hyatt Regency Century Plaza Hotel in Los Angeles. Presented by the Association of Film Commissioners International, the expo was a stark reminder of the amount of money and jobs the state stands to lose if it doesn’t step its game up. When California loses film shoots, it loses jobs and it loses tax revenue that can be reinvested elsehwere, so it’s a big deal. A Milken Institute report issued in February said that California lost 16,000 jobs in the film industry because of runaway production. These middle-class workers are employed locally in these other locations because, on top of better local incentives, labor rates can be lower and flying a crew from California is prohibitive.
California began its own tax incentive program in 2009, the California Film and TV Tax Credit Program. But the $100 million program prevents films with budgets exceeding $75 million from eligibility in the tax credit program. A piece of legislation to reverse the tide, AB 1839, is making its way through the Assembly. The legislation proposes extending the state’s program another five years and also includes:
- Lifting the budget cap on feature films eligible to apply for the program,
- Allowing all new one-hour television series, regardless of whether they are on network, cable or even Netflix, be eligible to apply for the program,
- Offering a 25 percent credit for television shows relocating to California in the first year.
The bill just passed the Assembly Arts, Entertainment, Sports, Tourism and Internet Media Committee on March 25th. It now moves to the Assembly Revenue and Taxation Committee. The bill’s author, Assemblyman Mike Gatto, who introduced the bill along with Raul Bocanegra, said he expects it to move easily through the Assembly, but says it might face more skepticism by the Senate and Governor Brown, who has yet to take a public position on the bill.