Calif. budget gives pic prod’n perk

Schwarzenegger faces runaway prod'n in 2006-07

The Governator wants California lawmakers to enact $75 million of annual incentives to prevent runaway production.

Gov. Arnold Schwarzenegger issued the declaration Tuesday as part of releasing a proposed $125.6 billion state budget for 2006-07. Schwarzenegger had promised last fall to endorse runaway legislation in the budget after the most recent incentive bill stalled amid opposition from watchdog groups.

“The governor continues to support bipartisan legislative efforts to address the economic impact of runaway film production,” Schwarzenegger’s budget document said. “Long-term revenue projections assume $75 million in annual tax credits available to production companies to encourage and retain filming in California beginning in 2007-08.”

California film commissioner Amy Lemisch issued a statement noting that the move shows that Schwarzenegger’s committed to supporting incentive legislation. “Production incentives in California will benefit the whole state by increasing jobs, creating revenue, and retaining our production infrastructure,” she added.

Assembly Speaker Fabian Nunez, who authored last year’s incentive bill, will continue to carry the legislation, according to Lemisch. His Assembly Bill 777 — backed by the governor and Hollywood labor unions — would have allocated as much as $100 million annually over 10 years in refundable tax credits to producers who shoot in California.

Goal was to level the playing field by allowing California to compete for projects that have been lured via incentives to states such as Louisiana and New York and thus retain a signature industry, preserve high-paying jobs and boost tax revenues. The bill would have provided 12% credits for wages and equipment with a cap of $3 million per production if 75% of the project was shot in California.

Opponents characterized the legislation as a handout to some of California’s wealthiest residents at a time when the state had been cutting core services.

Schwarzenegger’s new spending budget is significantly less austere than his first two budgets, thanks to an improved state economy. The Dept. of Finance expects to end the fiscal year in June with $7 billion more than previously forecast.

The DGA noted Tuesday that it has worked for many years with a broad coalition on the issue, adding, “A majority of our members live and work in California, and the Guild is supportive of any legislation that will make this state a more competitive location for filmmaking.”

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