Hooray for Hollywood Economy

150 150 Alexandra Bjerg

When people think of the center of the movie industry universe, they think California–and more specifically Los Angeles. But since the late 90’s, film and television production has been leaving the Golden State in search of better financial incentives offered by states like Georgia, New Mexico, and New York.

To combat runway production, the California Legislature passed the Film and Tax Credit Program in 2009. With final funding set to be allocated in July for the limited, five-year program, the Milken Institute released a report identifying recommendations for boosting the effectiveness of the program after assessing the first two years of the program.

The state Assembly passed a five-year extension of the program, but the bill stalled in the Senate amid funding concerns resulting from the state’s looming budget crisis and ballooning deficit.

The report titled: “Fighting Production Flight: Improving California’s Filmed Entertainment Tax Credit Program,” concludes that the incentive program has had “a real impact in arresting the decline of filmed entertainment spending and employment in California.”  But there is plenty more that can be done to maximize the performance of this vital and uniquely California industry right here in California.  

The report argues, instead of competing with other states offering higher tax breaks, California “should combine strong incentives with a combination of greater flexibility and availability in order to meet the demand that already exists.”

The report urges legislators to follow these recommendations to max out the effectiveness of California’s film credit program:

  • Expand the credit pool from the current $100 million annual fund to a level that can accommodate demand. A separate fund for television productions would allow a more targeted use of money.
  • Eliminate unnecessary contingencies to attract productions that create the most jobs and to facilitate producers’ long-term planning.
  • Deepen and broaden California’s entertainment industrial base to create an environment that attracts future productions.
  • Encourage local job creation and keep workers’ skills up-to-date to enhance the state’s supply and quality of production crew.
  • Target television production to increase, or at least maintain, current production levels with its consistent employment and steady cash flow.
  • Attract foreign and international productions to capture demand for production locales, facilities, and crews from the fast-growing global entertainment industry.

We will be talking with people in “The Business” and other major industires in California in the coming weeks. What do you think should be done to keep film and TV production in California?


Alexandra Bjerg

All stories by: Alexandra Bjerg