California film tax credit bill moves closer to passage
California lawmakers could soon take action to stem the flight of television and movie productions to other states and foreign countries.
Legislation to renew and possibly expand a 5-year-old state income-tax break for shooting in the Golden State cleared a key state Senate panel Wednesday and is only a few more votes away from landing on the governor’s desk.
The bill, AB 1839 by Assemblymen Mike Gatto (D-Los Angeles) and Raul Bocanegra (D-Pacoima) has enjoyed a smooth ride. It hasn’t received a single “no” vote in two Assembly committees, the full Assembly and, most recently, the Senate Governance and Finance Committee.
But a big question mark remains: How much money in tax breaks will the state provide?
The proposal’s authors want to extend — and possibly expand — a program that began in 2009 that has provided $100 million annually in tax credits for certain feature films, made-for-television movies and new television series.
Some supporters of the bill want to increase the total amount authorized to $400 million. But, so far, no dollar figure has been included in the bill.
The aim is to increase financial incentives available to the state film commission to encourage producers to film in California and not be lured away by better deals offered by New York, Louisiana, New Mexico and Canada.
So-called runaway film production has reduced California feature shoots by nearly half in the last 15 years and become a serious threat to the legendary movie industry, Gatto and Bocanegra say.
The loss of high-paying jobs and local tax revenue motivated movie studios, Southern California governments, economic development offices and service companies, such as caterers and payroll firms, to press for the bigger incentive program.
The need for a new tax credit became even more evident Tuesday when FilmL.A. released an annual survey that showed local TV-pilot shoots in Los Angeles had hit a record low. Only 44% of the 203 pilots filmed nationally were made in the L.A. area, down from 52% in the previous 12 months ending in May, FilmL.A. said.
Most of the others were shot in New York, Atlanta and the Canadian cities of Vancouver and Toronto.
The loss of pilots’ business is particularly frustrating to Southern California officials because studios spend millions of dollars on them and employ large crews. Each pilot costs between $6 million and $8 million to make.
The cost of the proposed film tax credits in the Gatto-Bocanegra bill has been left blank while California lawmakers and Gov. Jerry Brown finished crafting a state budget for the spending year that begins July 1.
Now that Brown has signed the budget, backers of the bill can negotiate the size of a renewed California film tax credit program. An agreement is expected in time for an upcoming hearing of the Senate Appropriations Committee.
Brown has remained noncommittal about whether he’d support a boost in the film tax credit of any size.
“We have to be careful because the desires are endless and they become needs very quickly,” the governor said in January. “There is a bit of an arms race between one state and another state. But I feel very loyal to the movie industry, and it’s part of California.... We certainly want to keep as much production as we possibly can.”
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