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Studios Need to Alter Their Mind-Set to Keep Productions in California

On a trip to Vancouver a few years ago, one TV producer surveyed the myriad projects being shot there and labeled the town Hollywood Sleep-Away Camp. Those visitors were drawn less by British Columbia’s natural beauty than by the siren song of its tax credits, along with Canada’s favorable monetary exchange rate.

Having witnessed a homegrown, signature industry migrate to far-flung (and invariably less-expensive) locales, California politicians have taken more aggressive action to stem the tide — namely, more than tripling California’s production tax-credits pool, from $100 million to $330 million annually — seeking to offer relief (belatedly, many would argue) to thousands of below-the-line workers who have lost jobs to the exodus, and cried out for assistance.

The question is just how effective such measures will be, long term, if Hollywood continues to behave in what can only be called a mercenary fashion, renting out its production guns — and the money they pump into local economies — to whomever’s willing to provide the most advantageous deal.

Because the truth is, there will always be somewhere to film that’s cheaper, whether that’s another state or international bastions like Canada, Hungary and South Africa. Moreover, as the corporations that control the major studios have become huge and diverse international enterprises, they feel more divorced from what might be called civic-mindedness in making such calculations, forcing states and countries into a pandering battle that further feathers their bottom lines.

Advocates of the credits have in the past stated that L.A. doesn’t necessarily need to completely level the playing field in order to help bridge the gap; rather, the hope is these financial incentives will make the home team competitive enough to allow execs to capitalize on more intangible benefits associated with lensing close to home, which include everything from access to experienced crews to letting people sleep in the comfort of their own beds. (Feel free to insert your own joke here about where show-business A-listers choose to sleep.)

Those dedicated to preserving the local industry, such as FilmL.A., have documented the discouraging trends, with pilot shooting in Los Angeles
falling to a record low during the most recent cycle — accounting for less than 20% of all those made. Meanwhile, states with tax credits, including New York, Louisiana and Georgia, have seen production booms.

Chasing business in this fashion is hardly confined to Hollywood, with Texas having been particularly belligerent about leveraging low taxes to lure companies into relocating from other states. Few industries, however, are as publicly and symbolically linked as Los Angeles and entertainment, adding insult to the injury of watching jobs and careers evaporate in the shadow of the Hollywood sign.

While watching states and countries kow-tow to the entertainment industry has always appeared unseemly, interested parties have practically given up trying to shame executives into exhibiting a sense of loyalty to anything beyond their quarterly earnings and stockholders. Even so, signs of the damage wrought by those priorities are plentiful, including a Southern California housing market where luxury-home sales operate on a gravity-defying tier compared with more modest ones — mirroring how the executive class is largely shielded from middle-class struggles in the same zip code.

All that serves as a backdrop to the tax-credit issue, and whether the Golden State’s attempted remedy will ultimately be a panacea or more of a band-aid.

Clearly, there’s an argument for trying. Yet unless the people who occupy the corner offices adopt a different attitude — one informed by some feeling of belonging to the city and country in which they live, as opposed to strict fidelity to profit margins — all the legislative finagling and creative bean-counting in the world potentially won’t be enough to firmly tip the scales.

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