Congressional Democrats Urge California to Expand Production Credit

Califronia Tax Incentives Sacramento Capitol
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Rep. Adam Schiff (D-Calif.) and more than two dozen other Democratic members of California’s congressional delegation are urging state lawmakers to pass legislation that would expand film and TV tax credits.

AB1839 passed the state Assembly 76-0 in June and is scheduled to come before the Senate Appropriations Committee on Aug. 11. The bill would extend the current program, set to expire in 2015, through 2021, and also widen the scope of eligible projects to include big-budget feature films and most new one-hour drama series, which have been migrating to other states offering more generous incentive packages.

“This is a critical moment for California’s economy and our history as the epicenter of the film and television industries,” Schiff said in a statement. “Hundreds of thousands of jobs hang in the balance. If we fail to take decisive action to enhance the state film tax credit, we run the real risk that many well-paying jobs will be lost for good to states with far more generous credits.”

In the letter to Senate President Darrell Steinberg and Assembly Speaker Toni Atkins, the lawmakers said that they “fear a day, not too far off, when the film industry in California is hollowed out and it becomes easier to produce a movie or television show in New York or Louisiana than in California. As production moves out of our state, skilled human capital will relocate along with it, and our greatest competitive advantage, our talented workforce, will move elsewhere. If that happens, it will be a tragedy for our state’s economy and our cultural history.”

Still to be resolved in the legislation is the amount that will be allocated each year for tax credits, currently set at $100 million per year. Negotiations are ongoing between the principal authors of the legislation, Rep. Mike Gatto and Rep. Raul Bocanegra,  and Gov. Jerry Brown (D-Calif.). Los Angeles city officials have been pushing for a figure that is competitive with other states, particularly New York, which allocates about $420 million per year.

Los Angeles Mayor Eric Garcetti noted that of the 54 big-budget feature films in 2012 and 2013, only one shot exclusively in California, while feature film production has dropped nearly 50% over the last 15 years.

The complete letter is here.

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  1. Joe says:

    Come on – this is purely a giveaway to the big studios. Or else ineffective. California is already expensive. They are only going to shoot here if they really don’t want to travel or for other strong reasons. The tax break is a gift. It’s not going to move the needle – to move the needle it needs to be so much money that it is crazy to do it.

    It would be more effective to develop a federal policy or law that no state can give such tax breaks. There is no reason that Hollywood studios should not pay their share of taxes and that other tax payers should subsidize production.

    • John C Reilly says:

      Good call, Joe. Let’s wait til the federal government does something about it because we all know how efficient the US Congress is. You are pathetically ill-informed, Joe.

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