California, New York, Georgia, Canada Competing for Industry Jobs

California-tax-credit-program-increase-auditions.jpgRecently the California Senate Governance and Finance Committee unanimously approved proposed legislation that would renew the film and television tax credit program seeking to minimize runaway production and maximize production in the state. AB 1839, the California Film and Television Job Retention and Promotion Act of 2014, was authored by Assemblymen Raul Bocanegra (D-Pacoima) and Mike Gatto (D-Los Angeles) as well as co-authored by more than 65 other legislators who were determined to create a bigger and better California-state tax program than the one currently on the books. In 2009 the state’s production tax credit program was created in response to feature films and television leaving California. AB 1839 would extend the program through 2020-2021, and would open it up to include all feature films no matter what the budget size, to television pilots, and to new hour-long series regardless of whether they air on TV, cable, or the Internet. Gatto said, “This effort is a rare example of government taking proactive steps to ensure well-paying jobs stay in our communities.”

Shortly before the vote, Hollywood non-profit agency FilmL.A. issued a 20-year film production report analyzing patterns of growth and decline in local filming created by developments in U.S. domestic film, TV, and commercial production market. Key research findings included:

  • In 1997, most large-budget studio feature projects were produced in California; but by 2013, most of these features were produced elsewhere–revealing a significant reduction in the L.A. market.
  • Although 2013 L.A.-based feature production increased by 21 percent in comparison to the category’s average over the past five years, it still remained down by 50 percent since peaking in 1996.
  • L.A.-based television production has shown growth since 2009; however, the increase is largely driven by reality TV and web-based TV production.
  • Los Angeles saw an increase in TV pilot projects from 2013 to 2014; this coincides with a record increase in demand for pilot development due to several cable networks and online streaming services–such as Amazon and Netflix creating more original programming. But Los Angeles only received 44 percent of these pilots, as contrasted to having 82 percent of pilot production in 2006-2007. Top-competing locations include New York, Georgia, and Canada.

The study concluded that generous tax incentive programs as well as an established or rapidly growing production infrastructure in other locales contributed to the declines in California production.

Mayor of Los Angeles, Eric Garcetti’s response to the report was, “This report underscores the urgency of our work to reverse runaway production. The entertainment industry is a cornerstone of our civic identity and our economy, with 500,000 jobs at stake. I will cut red tape at City Hall and fight in Sacramento to make sure L.A. is the best possible place for production and ensure that we are always the entertainment capital of the world.”

AB 1839 now goes to the Senate Appropriations Committee.