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Hollywood sees a jobs boost thanks to California tax incentives, a new report says

Hollywood sees a jobs boost thanks to California tax incentives, a new report says
Actor Dan Stevens, left, confers with director John Cameron on the set of FX's "Legion." The series was one of several to receive California tax credits for relocating production from out of state. (Suzanne Tenner / FX)

Each year, California taxpayers give out hundreds of millions of dollars in tax credits to movie and TV productions that shoot in-state. That money has helped to give a significant boost to production jobs, according to a new report.

The California Film Commission said in the report released Friday that in the 12 months that ended in June, below-the-line union workers logged 15.6% more hours than in 2014, the year before the program began handing out $330 million in credits per year to select productions. The prior 12-month period, ending in June 2017, showed a 12% increase in hours worked compared with 2014.

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Below-the-line workers typically consist of crew members whose jobs encompass a wide range of technical and support responsibilities.

Overall, the commission’s report found that productions receiving state tax credits hired more than 18,000 cast and 29,000 crew members during the first three years of the program. These productions generated $6 billion of direct in-state spending during the period, including $2.25 billion in qualified wages and $1.89 billion in qualified vendor expenditures.

The current incentive program was set to expire in 2020, but state officials recently extended it to 2025, at the same level of credits.

California instituted the program as a way to combat the runaway production phenomenon, which has seen numerous TV and movie shoots move to states such as Georgia, Louisiana and New York to take advantage of lucrative incentives.

Productions that are selected for California’s program are able to collect credits for as much as 25% of their spending — up to the first $100 million — on crew salaries and other qualified costs, such as building sets. Star salaries and other so-called above-the-line compensation don’t count. Studios can then use the credits to offset state tax liabilities in California.

Julia Louis-Dreyfus in a sixth-season episode of HBO's "Veep.,
Julia Louis-Dreyfus in a sixth-season episode of HBO's "Veep., (Justin M. Lubin / HBO)

Projects that shoot outside the 30-mile radius around Los Angeles qualify for additional incentives.

The program has seen the most success in persuading TV shows to stay in or move to California. Series that have relocated from out of state include Netflix’s “The OA,” FX’s “Legion” and HBO’s “Veep” and “Ballers.”

California has had a tougher time attracting big-budget blockbuster movies, the majority of which shoot in places such as Georgia, Britain and Canada.

“Despite the success of California’s film and television tax credit programs, the state has lost significant production as competing incentive-offering locales have achieved dramatic growth in production spending,” said the report by the film commission, the state agency that administers the program.

But some major studio movies have taken advantage of the state’s program, which features funds specially earmarked for big-budget movies. In a previous version of the state’s program, movies with production budgets above $75 million were ineligible for tax credits.

Paramount’s “Top Gun: Maverick,” which is currently in production, is one of the recent movies to qualify for incentives. The movie is a sequel to the original 1986 Tom Cruise blockbuster. Other upcoming movies to have qualified for state tax credits include Disney’s “Captain Marvel,” Paramount’s “Bumblebee” and Sony’s “Once Upon a Time in Hollywood,” directed by Quentin Tarantino.

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