Two recent studies by a USC professor cast doubts on the effectiveness of tax incentive programs for film and television production. Michael Thom, assistant professor at the Price School of Public Policy, published “Fade to Black?” last month in American Politics Research while “Lights, Camera But No Action?” appeared in the June issue of American Review of Public Administration. Both journals are published by Sage Publications in Thousand Oaks. “Fade to Black?” looked at how states have created and terminated production tax credit programs. Forty-five states between 1997 and 2015 had the programs but starting in 2009, 11 states discontinued the incentives. The study found that states starting these programs were driven by national popularity of production incentives and rising unemployment. Terminations were driven by falling unemployment, other states discontinuing the programs and spending cuts. Thom wrote that the more spending on a tax credit program, the less likelihood there was of ending it. “Therefore, even if other states nationally are terminating tax incentives and even if unemployment is falling, both of which should undermine the case for maintaining the incentives, their joint effect is simply not enough to overcome the momentum – political and bureaucratic – caused by billions of dollars of investment,” the study found. “Lights, Camera but No Action?” is an overview of tax and economic development lessons from production incentive programs. Thom wrote that the results of the study showed little evidence that states’ motion picture industries benefitted financially from tax incentives. “It appears that states spending more money on (incentives) were no more or less likely to reap gains in motion picture employment, wages, GSP (gross state product), or industry concentration,” the study concluded. Both studies were broad in scope. California was not highlighted in either. The state, however, came late to offering incentives, starting its program in 2009. In its first incarnation it offered a 20 percent credit for TV movies, mini-series and feature films with budgets up to $75 million and a 25 percent credit for TV series that move into California from out of state. In a bid to retain and attract production jobs, Gov. Jerry Brown signed bipartisan legislation in September 2014 to more than triple the size of California’s production incentive, from $100 million to $330 million annually. California Film Commission Executive Director Amy Lemisch said what sets the California program apart from other states is that it is targeted at those productions that are most vulnerable to being lured away – one-hour scripted television series and feature films. Additionally, the state gives credits for below the line spending only for crew, equipment vendors, locations, etc. and it does not go toward salaries for the actors, director and others. “It’s the nuts and bolts of doing a production,” Lemisch said. “That is not the case with out-of-state competitors.” In the first seven years of the program, $674 million in tax credits were given that resulted in $5.5 billion in direct spending, including $1.9 billion in below the line wages, according to the commission. “I feel strongly that it does provide a positive return on investment,” Lemisch said. “We are seeing that in production levels, employment and business at the supply vendors. We are pleased with the results of the program.” Record Relocation Media reports indicate that Warner Music Group will move from its offices in Burbank to downtown Los Angeles. The record company, whose labels include Warner Bros. Records, Atlantic and Rhino, occupies space both on the lot of Warner Bros. Studios and in an office building alongside the 134 Freeway on Olive Avenue. Music industry publication Billboard, quoting unnamed sources, reported that Warner Music will relocate to the Ford Factory in downtown’s arts district. Attempts to reach a representative of Warner Music Group to confirm reports of the move were not successful. Mary Hamzoian, Burbank economic development manager, said that the city has not been officially told that Warner Music will leave, Worthe Real Estate Group has done what it can to try to get Warner Music to stay in The Pinnacle building, but there may be other factors in play for the decision to relocate, Hamzoian said. The company would be moving into a historic building in a trendy part of the city, she added. Staff Reporter Mark R. Madler can be reached at (818) 316-3126 or [email protected].