Bill, which provided wage-based tax credits, voted down

Key runaway production legislation has evaporated in the face of California’s $24 billion budget gap.

The State Senate Appropriations committee voted down Assembly Bill 2747, which could have provided as much as $650 million in tax credits to producers between 2004 and 2010, in an 8-5 vote Saturday.

Vote came as the Legislature was scrambling to break a two-month deadlock over a $98 billion budget, with Assembly Democrats agreeing to over $1.2 billion in spending cuts.

The legislation, authored by Assembly Speaker Herb Wesson, was aimed at productions with budgets under $10 million. It would have provided wage-based tax credits for the first $25,000 paid to each employee.

Gov. Gray Davis first proposed the legislation in January with a start date of mid-2004 in order to give the state time to recover from its budgetary crisis. Hollywood unions had strongly supported the bill, which passed the State Assembly in May, as an effective tactic for keeping producers from filming in less expensive foreign locations.

But in an editorial last week, the Sacramento Bee strongly criticized the bill as ill-timed in the face of the state’s financial problems: “At a moment when the Legislature is looking at raising taxes on all Californians and cutting aid for the most vulnerable poor and elderly, the idea of giving hundreds of millions in subsidies to Hollywood producers and giant media companies is obscene. AB 2747, which cleared the Assembly with only Assemblywoman Dion Aroner (D-Berkeley), voting no, deserves to die in the Senate.”

Pending federal runaway production legislation, offering a similar wage-based tax credit approach, remains alive a year after its introduction. Backers have said they hope to attach the bill to another piece of legislation.

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