Califronia Tax Incentives Sacramento Capitol
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When California’s state Assembly gave unanimous approval recently to legislation that would expand film and TV tax incentives, it did so with a key figure left blank in bill AB 1839: The amount of money to be budgeted for the credits.

While Los Angeles Mayor Eric Garcetti has called for an amount that is competitive with New York, which gives out about $420 million annually, the challenge for the legislation’s co-authors has been to come through the legislative process with a figure that is still significant.

Although legislative leaders and Governor Jerry Brown reached an agreement on the coming fiscal year budget, the proposed expansion of the program would take effect after that, on July 1, 2016. There have been ongoing questions over how much to offer, as the governor’s office grapples with fiscal issues for the coming years. But there also has been concern that putting forward a figure that becomes a target of critics who question the value of incentives.

Industry supporters are now saying that there may be no number until August. But Ben Golombek, a spokesman for the bill’s co-author, Assemblyman Raul Bocanegra, said via email, “We said we weren’t going to put a number in until after the budget is resolved, which will be Sunday. So, it could be later this month, could be July or August, but I certainly wouldn’t characterize it as no number until August at the earliest. We’re going to continue working on it.” Assemblyman Mike Gatto is the principal co-author.

The legislation would expand the program by making big-budget movies and most TV series eligible for the credit, along with credits for such post-production activities as visual effects and music scoring. The California Film Commission would be allowed to start allocating the credits on January 1. The state’s existing $100-million per year program runs through 2017.

The legislation next comes before the Senate Governance and Finance Committee on June 25. While there is confidence among supporters that the bill will clear that next step in the process, it will also be facing one of the chief critics of tax incentives. The committee is chaired by Lois Wolk, a Democrat from Davis, who cited a recent report from the legislative analyst’s office that was lukewarm to the idea of expanding the program. The LAO questioned whether incentives were good public policy yet said that, given the competition from other states, California’s legislature may be “reasonable considerations to extend or expand the credit.”

“I continue to share the concerns that have been raised by the LAO,” Wolk said in a statement. “The committee is still analyzing the bill and I will be ready to make further comments early next week after further analysis.”

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