Destination: California

Budget woes undercut org's efforts for incentives against runaway prod'n

HOLLYWOOD — One of the surest indicators of the depth of California’s budget crisis is the state’s film commission.

Even though Arnold Schwarzenegger’s been governor since November, the 19-year-old agency remains a shell of its former self. During his campaign to recall Gov. Gray Davis, Schwarzenegger asserted that he’d support efforts to keep filming in California but the state’s jumbled finances have consumed virtually all his time since then.

Meanwhile, as with many other parts of the state government, the commission has been hobbled. It was forced in the fall to cut its 20-person staff by half at its Hollywood headquarters after being allocated a 2003-04 budget of $1.2 million, compared with $12 million in 2002-03, with the proviso that operations be limited to permitting for shoots on state property.

That move effectively ended marketing and incentive efforts, including the Film California First program that subsidized fees paid by producers for government services during filming on public property, and allocated $19 million in rebates to productions as part of its goal to put the brakes on runaway production.

In February, Karen Constine, director of the commission since 2000, ankled the post.

Small gesture

Thus far, Schwarzenegger’s staff has only had time to place a welcome message on the film commission Web site, which reads in part: “The state’s widely varying landscapes can replicate locations around the world and beyond. So it’s no surprise that California logs more film and television production days than anywhere else.”

Still, runaway production remains a persistent problem with producers opting for lower costs and government subsidies in Canada, Australia and Europe. Even though the weaker dollar means less bang for the buck in overseas markets, the savings and incentives are strong enough that producers continue to flee California on low- and midbudget films in significant numbers.

For now, Schwarzenegger has backed federal tax depreciation legislation but has not yet hammered out an equivalent state proposal.

“The infrastructure that enables the film business to be headquartered in Hollywood is being slowly eroded,” admits Steve Katz, an industry vet who won an Oscar for developing Dolby sound and operates the Center for Entertainment Industry Data & Research. “TV is healthy since it can’t really run away because of its episodic nature, but the only films that stay here are tending to be the big ones with budgets of at least $50 million that need all the facilities and amenities that Hollywood offers.”

Transition team

Constine’s departure has left the commission in the hands of Jorge Jackson. He will help the transition of the commission to an arrangement in which it operates under the state’s business, transportation and housing agency, which has been overseeing the commission since last year.

“We are going to make the film commission more user friendly since it is important to the state’s economy,” he says.

The commission is interviewing candidates to replace Constine with an eye to tapping a recognizable industry veteran within the next few months. “It will be someone who can balance the interests of the state and the industry,” Jackson says.

The new commish will obviously have the tricky task of persuading a wary state Legislature that California needs to incentivize the film industry in order to reap the economic benefits — estimated at seven times the amount of money spent on production.

One problem with making such a case has been the dearth of concrete showbiz data. The Entertainment Industry Development Corp., which handles permitting on public property for much of the Los Angeles area, has been working for several years from a $742,000 government grant to compile such a database.

EIDC VP Kathleen Milnes says the full report should be available in June, when the grant expires. She’s hopeful that the usefulness of the database will attract government and industry funding to keep it updated.

“We want the information to be owned by everyone,” Milnes says.

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