The Hunger Games: Mockingjay – Part I.” “Anchorman 2: The Legend Continues.” “Blended.” “Fast & Furious 7.” “Battle: Los Angeles.” This is just a small sampling of recent big-budget movies that were filmed outside of California – in Georgia and Louisiana, specifically – hot new filmmaking destinations due to the generous tax credits they offer. California’s reputation as an entertainment mecca may be its most illustrious characteristic, but public perception isn’t fooling producers. The state only allocates $100 million annually in sales and income tax credits toward the film industry. Because of the heavy volume of applications – 497 entered the lottery this year – funds are used up immediately. Out of those 497, only 26 projects have been granted tax credits so far. The rest have been put on a waitlist. If history is any indication, those projects aren’t going to wait around for long – most choose to relocate to states and countries with available tax credits. A bill that would extend the California Film and Television Tax Credit program for another five years is moving through the state Legislature, but an extension alone may not be enough. California representatives in Congress are urging Sacramento lawmakers to increase funding and expand the credit to more projects. A report by the California Film Commission recently found that the state has lost $2 billion in production spending over the last four years. Last year, 42 projects that didn’t make the cut spent over $1 billion outside California. This figure doesn’t include projects that did not qualify for film tax credits because the criteria are too stringent. There is a silver lining, though: the California Film and Television Tax Credit program works – it just isn’t fulfilling its potential. The first six annual allocations of the program resulted in $4.75 billion of direct spending in California. The California Film Commission estimates that this year’s selection of projects will generate $802 million for the state. TV shows like “Teen Wolf” and “Being Mary Jane” have moved production back to California from other locations after being awarded tax credits. Still, other state and international film attraction programs trump California’s. Many film tax credit programs in other places are permanent, or are expeditiously renewed. New York allocates $420 million in tax revenues toward filming yearly, and promotes the program throughout the country. The program has brought New York silver and small screen successes such as “The Amazing Spider-Man 2,” “The Good Wife” and “Elementary.” Those that benefit most from film tax credits in California aren’t the “talent” – the credits do not contribute to actors’, directors’, and screenwriters’ salaries. The first $600 million in annual film tax credit allocations resulted in qualified wages of $1.48 billion to more than 50,000 middle-class families, including thousands of “below the line” workers like gaffers, prop masters and those in craft services. And the economic impact is local. Last year, the motion picture and sound recording industry employed 119,000 people in Los Angeles. Runaway production has left 15,000 Angelenos out of work or sent them away from their families for months at a time. The Valley Industry & Commerce Association (VICA) supports Assembly Bill 1839 by Assemblymen Raul Bocanegra, D-Arleta, and Mike Gatto, D-Burbank, which expands eligibility to large-budget films, new one-hour television series and television pilots, and extends the program for another five years. VICA also stands with those in Congress pushing Sacramento to increase film tax credit allocations and lower the thresholds for qualification. There is clear cut evidence that California Film and Television Tax Credit program funding is in extremely high demand, and that the program generates billions in revenue for the state. Why aren’t lawmakers going with what works? We must restore what was lost before we further diminish California’s entertainment industry. The Valley Industry and Commerce Association is a business advocacy organization based in Sherman Oaks that represents employers throughout the Los Angeles County region at the local, state and federal levels of government. How to reach us GUEST OPINIONS: Op-ed pieces must be 700 to 800 words and on topics about the San Fernando Valley business community. Please submit op-ed ideas to [email protected].
