California would triple tax breaks for film production under deal

SACRAMENTO, Calif. Wed Aug 27, 2014 3:36pm EDT

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SACRAMENTO, Calif. Aug 27 (Reuters) - California will triple its tax breaks for entertainment companies doing business in the state, the latest effort to stem a tide of runaway production that has cost billions in revenue in Hollywood's home state under a deal announced on Wednesday.

The increase in tax credits, aimed at luring production back to California even as other states offer tax breaks of their own, comes just a few weeks after the California Film Commission said the state had lost $2 billion in the past four years alone as producers sought cheaper places to do business.

"This law will make key improvements in our Film and Television Tax Credit Program and put thousands of Californians to work," said Democratic Governor Jerry Brown, who signed on to the deal along with the Democratic and Republican leaders of the state legislature.

The deal, which still must be approved by both houses of the legislature before the end of their session this week, would increase the amount of money available for tax credits for film and television production to $330 million per year, up from about $100 million.

If passed and signed by the governor as expected, the tax credits will be awarded through a lottery system, with preference given to companies that create the most jobs and do the most to help the state's economy, Brown's office said.

With thousands of jobs dependent on film and television production in Southern California, the plan was welcomed by Los Angeles Mayor Eric Garcetti, who said it would "protect and expand an industry that is integral to our economy and our identity."

California has been battling for years to keep its storied film industry - a source of thousands of jobs and millions in tax revenues - at home, even as producers have sought cheaper places to film than heavily unionized Los Angeles.

"We would really like to return California to its heyday in terms of being the number one place for entertainment production," said film commission executive director Amy Lemisch, when her organization released a report on the problem last month.

The number of productions fleeing the state has increased in recent years despite a state program meant to offer tax incentives to keep them in the most populous U.S. state. (Reporting by Sharon Bernstein; Editing by Sandra Maler)

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Comments (2)
VernonDozier wrote:
It’s just too expensive to do production in Los Angeles.

What they’ve done is created an entire licensing and license enforcement permitting board which simply adds overhead and requires public comment and disclosure of productions.

A friend told me that the amount of disclosure required in Los Angeles is causing a reverse effect to production in the LA area.

For example, if you live near a place that a production has recieved a permit, people have been known to save that date to perform yard work, after the crews, actors, and talent arrives, and filming starts. Los Angeles Residents using leaf blowers, and other yard equipment often prevent a production from being filmed. This adds additional cost.

Producers in the industry know this happens, and often pay upwards $1,000 extra, in cash, per day, for neighbors to schedule yard to occur on another day.

Los Angeles is a very entrepreneurial city, but unfortunately, the permitting doesn’t do much to ensure the production stays on-track. There’s no way for producers to recover money or even file a complaint if they’ve been blackmailed, but that seems to be the way Los Angeleans value the content business.

In other cities and towns across the US and Canada, people are quiet on the set; including neighbors.

Aug 27, 2014 6:07pm EDT  --  Report as abuse
VernonDozier wrote:
It’s just too expensive to do production in Los Angeles.

What they’ve done is created an entire licensing and license enforcement permitting board which simply adds overhead and requires public comment and disclosure of productions.

A friend told me that the amount of disclosure required in Los Angeles is causing a reverse effect to production in the LA area.

For example, if you live near a place that a production has recieved a permit, people have been known to save that date to perform yard work, after the crews, actors, and talent arrives, and filming starts. Los Angeles Residents using leaf blowers, and other yard equipment often prevent a production from being filmed. This adds additional cost.

Producers in the industry know this happens, and often pay upwards $1,000 extra, in cash, per day, for neighbors to schedule yard to occur on another day.

Los Angeles is a very entrepreneurial city, but unfortunately, the permitting doesn’t do much to ensure the production stays on-track. There’s no way for producers to recover money or even file a complaint if they’ve been blackmailed, but that seems to be the way Los Angeleans value the content business.

In other cities and towns across the US and Canada, people are quiet on the set; including neighbors.

Aug 27, 2014 6:07pm EDT  --  Report as abuse
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