Hollywood Groups Ask Legislators for Tax Breaks

Film and TV workers told state lawmakers Wednesday that they must pass meaningful tax incentives and cut bureaucratic red tape if California is to thwart competition from Canada and other low-cost countries that are siphoning off production.

But while sympathizing with their plight, state officials repeatedly warned that the climate in Sacramento for Hollywood tax breaks increasingly is cloudy because of the state’s worsening financial picture.

The hearing at the Los Angeles Center Studios--which in true Hollywood style included a truck offering free cappuccinos--comes amid growing pressure in Washington to provide tax and other incentives to producers to help offset cost advantages that are luring them to other countries, such as Canada and Australia.

The hearing offered a bleak assessment of what has to be overcome to stem the flight of productions.

Milken Institute economist Ross DeVol cited figures showing that from 1990 to 1998 the percentage of U.S.-developed productions shooting in foreign countries nearly doubled to 26.5%, with 82% of those productions shooting in Canada. He also cited figures showing that the budget of a hypothetical $40-million film could be cut by 25% in Canada.

Actor Matt Kimbrough, representing the American Federation of Television and Radio Artists, said runaway production has emerged as the most important issue to rank-and-file actors.

“It’s No. 1 at parties, in our audition rooms and is particularly No. 1 in our union halls. We are trying to ... find a way to counteract it,” Kimbrough said.

Involved in the hearing were two Assembly select committees--an entertainment and the arts committee chaired by Assemblywoman Jackie Goldberg (D-Los Angeles), and a committee on California’s film future chaired by Assemblyman Dario Frommer (D-Glendale).

Speakers included economists, producers, film agency officials, union executives and actors, such as “NYPD Blue” star and Screen Actors Guild officer Esai Morales.

Some suggestions included offering productions sales tax rebates, expanding worker training programs in digital technologies and broadening a new state program offering up to $300,000 in rebates to productions to help pay police and fire costs, film permit fees and location fees.

Speakers also repeatedly complained about how little data exist on the industry. That’s because economists don’t always agree on how broadly to define entertainment jobs, and because historic ways economists count workers don’t include numerous independent contractors that permeate today’s Hollywood. For example, the Los Angeles County Economic Development Corp. estimates entertainment employment in Los Angeles County at 242,000, more than 100,000 higher than the state does.

James D. Brubaker, a veteran Universal-based physical production executive, said he too often encounters indecisiveness among state officials when they are needed to help solve a film problem.

“It’s never yes or no. If they would just say no then we would be able to move on,” he said.

Brubaker expressed frustration with the red tape he ran into last month while trying to shoot a scene of a bus plunging into a Northern California river for the upcoming film “Dragonfly.” Initially, Brubaker complained, he was told no “because they’d never had anybody do it before.”

Frommer, who sits on the California film commission, said the commission is only advisory and needs to be empowered to act forcefully when filmmakers run into unresponsive bureaucrats.