California Senate Approves Sweetened Movie-TV Tax Credit

California State Capitol Tax Incentives
Justin Sullivan/Getty Images

The California State Senate has approved legislation on a 32-2 vote to extend and expand California’s movie and TV tax credit, more than tripling its current size to $330 million annually over five years.

The vote came on Friday afternoon, two days after legislative leaders and Gov. Jerry Brown announced that they had reached a deal on the legislation.

The $330 million annual outlay would be less than the $400 million-per-year outlay sought by the bill’s principal co-authors, Assemblyman Raul Bocanegra and Assemblyman Mike Gatto. Still, the program will see a significant improvement from the $100 million per year currently awarded in California tax credits.

A coalition of unions, the Motion Picture Assocation of America and notable actors such as Halle Berry, Danny Glover, Ron Perlman and Daniel Stern have spoken out in favor of the legislations, Assembly Bill 1839.

“This expansion of the Film and TV Tax Credit is a huge victory for Californians,” said Halle Berry. “Our industry produces so many great jobs for Californians—especially the people behind the scenes who make the magic happen—the make-up artists, grips, caterers, dry cleaners, accountants, special effects–you name it. We must do everything possible to keep these creative people fueling our economy.”

The legislation will take effect in fiscal year 2015-16. The bill now heads to the Assembly and to Brown’s desk for signing.

Sen. Lois Wolk, head of the Senate Governance and Finance Committee, told the Senate that she opposed the bill on grounds of the lost opportunities for the $1.65 billion in general fund spending. “I love movies but I think are better uses,” she said.

The backers of the bill marshalled union members to support the campaign, holding rallies this year in Burbank, Sunland, San Francisco and Sacramento. Senate President pro Tempore-elect Kevin de Leon (D-Los Angeles) — who played a key role in hammering out a deal with Brown and Republicans — alluded to that support on the Senate floor.

“The behind-the camera workers’ voices are rarely heard, but we heard them loud and clear,” he said. “AB 1839 was written for them. Bolstering middle-class jobs is of paramount importance for California’s economy.”

The legislation would expand the types of projects that are eligible for the credit, including most one-hour drama series and big-budget feature films. The California Film Commission currently awards credits via a lottery, which will be replaced by a new system in which applicants will be scored based on the number of jobs that they will create.

“This is not $330 million dollars out the door,” De Leon said. “It’s credited after the jobs have been created and verified. It’s money spent only after the production is complete and our local economies have been bolstered.”

 

 

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  1. dems are thieves says:

    “We must do everything possible to keep these creative people fueling our economy.”

    Except lower taxes and make California welcoming to business. This is one of the Democrat kleptocracy’s lesser crimes (only a few hundred million dollars spread over several years), but it is emblematic. And note that it is no longer a lottery, now they get to control the payments more directly. This kind of money the Democrats love in politics.

  2. B says:

    The $400M doesn’t need to go to just big budget films. Many films that require modest budgets still must hire a significant number of trained people in order to finish and distribute the film. That is the point – keep those jobs and that income in CA, instead of seeing it all go to NZ, Canada, Louisiana, or any other state. And the money that is earned directly by those working on the film goes into the local economy via food, shelter, gas, clothing, entertainment, etc. instead of being spent in other states and countries while working there. As to making films ‘anywhere’, that is not true. You have to have enough qualified, knowledgeable crew people, decent sound stages or outdoor locations with good weather, experienced post production staff and facilities, etc. Or you end up with a movie that will not go anywhere because no one would want to watch it!. Some of the destinations outside of CA have now been given enough time to build up the infrastructure and depth of crew to become significant secondary shoot locations and competition to CA, but not many. And they require that the money be spent in their state or country! Why would CA not want to keep that money here and return to dominating the film production market????? This kind of tax credit is a great beginning to making CA the film capital of the world again.

  3. OPMER says:

    Runaway production is not only about credits, it’s about creativity. That’s why Avatar is being filmed in NZ or why Peter Jackson made the Ring movie there because of vision not because of tax credits, California was never an option. Look at Louisiana one of the best states to do business in while California has the 2nd highest taxes in the country.

  4. Vulcanoid says:

    Cut the red tape, high taxes and it will do just fine but I predict this will backfire big time on them. Hollywood hasn’t made a decent movie in years, it’s mostly reboots and retellings.

  5. D says:

    The worst drought in a generation, second highest taxes, but hey at least California gets another lifeline…for now. But this won’t change a thing, their glory days are long behind them. But thinking about it, what about the other industries that left California for greener pasture what’s being done to bring them back? Besides speaking for myself California is hackneyed, movies and TV shows can be made anywhere and everywhere these days. It adds to the authenticity when a show is made in the city where it is set not in some back lot in Burbank.

  6. Paul Karl Lukacs says:

    Why is this article about the California Senate illustrated with a photograph of the California Assembly chamber?

  7. Debra De Graw says:

    This is a great move in the right direction to keep middle class jobs in California.

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