Drawing parallels between runaway production in entertainment and the demise of the steel industry, Rep. Xavier Becerra (D-Los Angeles) told a San Fernando Valley economic group Tuesday that lawmakers need to combat the $10-billion problem with revisions in the U.S. tax code.
Though short on specifics, Becerra urged members of the Valley Industry and Commerce Assn. (VICA) to lobby Congress to pass legislation that would protect against the exodus of entertainment productions to countries such as Australia, England and Canada.
"The worst thing would be for a Canada to develop a Hollywood," Becerra said. "This is an industry we are going to have to fight to defend. We have to compete now so productions stay here. We don't want entertainment to be like the steel industry."
Last year, the House of Representatives passed legislation to provide a tax rebate of up to $4,000 for each worker on lower-budget productions shot domestically. But that bill stalled in the Senate and died with the 106th Congress.
Becerra, a candidate for mayor of Los Angeles, said lawmakers would try again this year to craft legislation based on tax incentives for the industry. The legislation would target commercials, movies of the week and lower-budget independent films.
The congressman noted that a chief concern, particularly for California, is if the flight of production leads to infrastructure growth in other countries. That could lead to more desertion.
A U.S. Commerce Department study released this month showed that from 1990 to 1998, the rate of U.S.-developed film and television projects produced abroad almost doubled from 14% to 27%, while economic losses from runaway production increased five-fold from $2 billion to $10 billion.
In contrast the total value of film and television production in Canada was more than $3.5 billion in 1999, triple that of 1992-93.