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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