Hollywood ending for film and tax credit program?

150 150 Ed Coghlan

Transformers film crew at Edwards Air Force Base in Southern California. (Credit: U.S. Air Force)

When you think about the entertainment industry, you might think about movie box office receipts and television program ratings. You might want to add state politics to your thinking.

The entertainment industry is a huge employer in California, particularly in Southern California. But the industry has been raided by other states who offer studio executive and producers very aggressive tax breaks to entice them to locate their production elsewhere. And it has worked for years.

The jobs that are lost are the many support jobs like drivers, grips and caterers who generally don’t travel to the new locations sites like directors, actors and producers do.

The Legislature is expected to finish its work on the California Film and Television Credit Program which appears on its way to the passage of a 2-year extension next month.

But questions remain. And this where the regional nature of the state’s economy comes into play.

For elected officials from Southern California, the tax credit means a net return to the state’s economy and a multiplier of jobs for folks who work on the productions. In fact, they believe that California should be much more aggressive in keeping these jobs in the state. For some elected officials from Northern California, the tax credit is viewed as more of a giveaway and not effective.

For FilmLa and other organizations that promote more entertainment employment in California, the numbers are chilling. Feature film production has been leaving for years. Television production in Los Angeles suffered double-digit losses in production of TV dramas (down 39 percent) and TV reality shows (down 16 percent) for the 2nd quarter versus the same period in 2011. The City of Angels apparently hasn’t lost its sense of humor, since production of TV sitcoms was up (35 percent) considerably. Since sitcoms are usually shot on sound stages, Southern California maintains its dominance in this category given the large infrastructure that already exists.

Adding to the drama, there is a question whether Governor Brown will sign legislation that allows film and television tax credits. With his upcoming tax initiative (Prop 30), the Governor might be thinking he won’t sign it in order to protect his argument that California needs more revenue now.

We might be in-store for a dramatic Hollywood showdown. We’ll keep you informed.


Ed Coghlan

All stories by: Ed Coghlan