‘Runaway Productions’ Threaten Our Stability

Mention “Southern California” and “industry” in the same sentence and any listener will supply the third part: “Hollywood.”

For most of this century, film and television production have been a staple of our area’s economy and cultural life--and one could say our identity. Thousands of people who live and work in the San Fernando Valley--not only actors and directors but grips, lab technicians, heavy equipment operators, caterers, set builders and a host of others whose titles we read in the credits--have built long-term careers and stable lifestyles in the entertainment industry.

Now that stability, which has become such an important part of the Valley’s economic life, is facing its most dangerous threat.

That threat is “runaway production,” the loss of location shooting jobs, especially to other countries such as Canada and Australia, which offer generous tax incentives and other perks with which our local economy cannot now compete.

In Canada, for instance, producers receive a 22% tax incentive from the federal and provincial governments. Some provinces even offer location scouting and chauffeur service. It is estimated that, between 1996 and 1997, California’s economy lost $1.2 billion in production that went to other countries. In the 1998-’99 production season alone, 11,300 acting jobs--and for each of them, dozens more crew and craft jobs--were lost.

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The result in human terms is a blow to the rhythm of our community’s daily life. People who always knew where their next paycheck was coming from wonder, now, how they will make their next house payment or what will become of their plans to send their children to college.

This means that our residents will be far less likely to afford to buy homes or cars or to patronize restaurants or boutiques. Those businesses also lose revenue, as do the independent vendors who support local location shooting: dry cleaners, cosmeticians, suppliers of light fixtures and other equipment and so on.

People with the ambition, talent and willingness to work their way up, as actors, producers, couriers or set painters on low-budget productions, attaining the experience and know-how that build careers in entertainment, are looking in vain for that bottom rung on which to set their feet.

For the first time in years, the ambitious and talented are thinking that perhaps they ought to move away from Southern California in order to go where the action is.

Because this problem has reached a critical point, now is the time to act. Along with my colleague in the state Assembly, Scott Wildman (D-Glendale), I am authoring legislation to reward, through tax incentives, those productions that remain in California. Assembly Bills 484 and 358 would offer a 10% tax credit to offset specified labor costs for productions shot in California. The unions have already done their part and actually lowered their scale to make local production competitive, but they haven’t been able to compete with the large financial incentives offered by some governments of other countries, including Canada.

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Critics might say we are using state money to make the rich richer. But the truth is, companies will almost always shoot where the bottom line is best. I want that to be in California so that the jobs stay here.

Even so, I see this legislation as just the beginning of a solution. I am not inviting us to turn our backs on globalization. California is a Pacific Rim state, a leader in worldwide trade. Our electronics industry and a host of other businesses depend on our willingness to think and act globally.

However, along with the opportunities brought by globalization, we face the challenge of competition with other places that actively protect their labor force while they attempt to build their own emerging industries.

We must respond to this challenge by making California a competitive place to do business while upholding the standard of living of our work force.

We already have a leading edge in the talent, prestige and productivity of our film and television work force. They are the people who made Southern California justly famous all over the planet for the astounding variety, quality and innovative genius of our entertainment products. Now they need us to bring back the jobs.

We have to try to make it easier for production companies to afford the very best.

Assembly member Sheila Kuehl (D-Santa Monica) represents portions of the San Fernando Valley and Westside.