California State Senator Calls for Delay in Expanding Film and TV Tax Credit

Califronia Tax Incentives Sacramento Capitol
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Lois Wolk Adds a Dose of Skepticism to Idea of Tax Credits

On a day when Southern California lawmakers called for increasing the state’s incentives for film and TV production, with Los Angeles Mayor Eric Garcetti saying that advocates would “storm” Sacramento to lobby for expanded credits, a Northern California lawmaker has added a dose of skepticism to such an effort.

State Sen. Lois Wolk, chairwoman of the Senate Committee on Governance and Finance, is calling for no expansion or extension of the incentive program until the chief legislative analyst completes a study of the incentives and what impact they have had. That study is not due to be completed until Jan. 1, 2016, although it is possible that it could be completed before then.

“We should at minimum wait for that study before we even consider increasing the amount or extend it any further,” Wolk said in a statement, adding that it “makes no sense to consider renewing the credit before we have completed the current one and the study is completed.” The current package of incentives are set to expire in 2015.

Before the program was last extended in 2012, the legislative analyst sent her a letter concluding that the program resulted in a net decline in state revenues. Advocates of incentives said that the report didn’t account for such things as the “multiplier effect,” or the impact that the program had on parts of the economy outside of entertainment.

Wolk, whose district covers an area just west of Sacramento, also said that the FBI investigation of State Sen. Ron Calderon, in which agents posed as movie producers seeking an expansion of the tax credit program, “certainly casts a dark cloud over the whole subject. Further, it underscores an inherent problem in all of these tax credits that spend millions of dollars with little or no transparency or accountability.”

Wolk voted for the last extension of the tax credit in 2012, when the state Senate voted 32-2 to extend the program through 2015. But she said that she was “not a fan of tax credits in general,” and her office issued a press release that included contact information for several groups that have been critical of the production tax incentive, including the Tax Foundation and the Center for Budget and Policy Priorities. “I’m a real skeptic of all of [the tax credits] and have done everything possible to limit their size and duration to build in as much accountability as possible.”

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  1. Wm Morgan says:

    I just read where we lost the 777 jet program to Washington because their legislature went into special session to give billions in tax breaks to Boeing, Long Beach was considered the front runner until the tax breaks were offered . Not money, but tax breaks. Washington’s idea is that some 58,000 jobs will be forthcoming and the surrounding industries, and taxes will be generating tremendous revenue to the state. California however, can’t figure these things out, we now have replaced the aerospace and motion picture industries with textiles as are number one industry (sewing machine operators). Maybe when California runs out of people to tax and tax rates to increase because there tax base is textile workers they will figure out that we should have kept these proud industries in our state. That they are worth far more than the incentives it takes to keep them here.

  2. Randy Nolen says:

    Im a Camera Operator in Hollywood Local 600 w/ over 30 years invested in my Career and I’ve seen the results of the California State Legislature letting another Important Industry,” The Film industry!”, slip away from this State! This Industry is important to California’s Economy! California has to compete with other Tax Incentive States or this Industry in California is Dead! Why does the State Legislature not realize The Film Industry has lost thousands of good paying jobs to Run-Away-Production, jobs that paid Taxes, both State & Local, not to mention the loss of income of all the Related businesses in Calif. I can’t pay my Property Taxes, State Income Taxes, or Sales Taxes if I have no Income! Already Members of the Film Industry are pulling up roots in California and moving to the Incentive States following the work like Migrant Film Workers! If Senator Wolk wants a study on the effects on California’s Economy by letting one of the biggest Industries in California leaving California come to my House! I’ll be glad to to enlighten you.

  3. Engineer's RIG says:

    I don’t think Garcetti gets it. A film czar is the last person who will fix it. Besides they only have themselves to blame for this, they aren’t talking to the right people. But you know what, what about the other industries that have left LA for more favorable conditions? What’s being done to bring those back?

  4. Beau Baker says:

    Dear Senator:

    I tried to post this letter on the CONTACT ME page of your website, but it restricts comments to people in your district. I may be wrong, but I believe that your paycheck comes from people all over California, and, again, I might be wrong, but the laws you vote on probably affect the entire state and not just those in your district. So it might be a good idea to let folks from the entire state to leave comments there.

    Now, on to the main reason I’m writing this. The Variety article says you think the California incentive for filming be delayed. Until some kind of “study” is presented to you years from now.

    I have worked in the TV/Movie Production field for over 35 years. You do not need a three year study to determine how the lack of California tax incentives for keeping production in this state has decimated the industry. You need to leave Sacramento, come visit Los Angeles, have lunch with some of my fellow crew people, and we’ll fill you in. Or you can just ignore the problem until some expensive and outdated “study” crosses your desk. I’d like to know who is doing this study, because if it’s to have any validity, once again, you need to leave Sacramento and visit Los Angeles and actually talk to the people who’s lives are affected. These incentives are not corporate welfare. The movie studios go where the deal is best for them, not the crews. And since movies can be shot where ever there a place to put a camera, it makes this industry unique. Much of what California is, is because of the film industry. And we’re allowing it to die. There are many ways that don’t involve tax incentives that can help keep production in the state. Do you know what they are? So please, get informed. Come visit. I’ll buy lunch.

    Beau Baker
    Production Sound Mixer

  5. Julian Tyler says:

    “We should at minimum wait for that study before we even consider increasing the amount or extend it any further,” >> I think this is short sighted and not good policy.

    The “multiplier effect” is real. It is difficult to calculate, and sometimes see, especially for people in the “bubble” that is Sacramento.

    Sacramento policy makers should remember that film production feeds and seeds tourism, hotels, restaurants, services and indirectly employs thousands. There is value in tax incentives.

    Films and TV shows that feature California prominently should have access to an uncapped pool of incentive dollars. Much like the “cultural test” model that the UK has, California should provide tax incentives to all films, TV shows or content that promote and feature California locations, or meet certain fixed guidelines.

    Just my quick thoughts.

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