L.A. Mayor Declares Runaway Production an Emergency

August 29, 2013

Fleeing-Filmmakers-Hollywood-Mayor-Garcetti.jpgThe entertainment industry in Los Angeles is not looking so glitzy and grand these days. Industry jobs are, in fact, plummeting due to a steady stream of fleeing filmmakers. That is, most large-budget film and television shows are now being filmed on location outside of the state so productions can receive considerable tax credits elsewhere. For instance, California’s portion of hour-long network dramas dropped from 89 percent in 2005 to a mere 39 percent in 2012. And with TV and film production costs skyrocketing over the last decade, out-of-state tax incentives can add up to saving studios tens of millions of dollars on just one movie. Indeed, over 40 states, as well as Australia, Canada, and the UK are currently offering worthwhile credits, enticing productions to move out of Hollywood. As a result, both large and small-screen productions are fleeing, affecting not only those involved with the productions themselves, but hurting many other businesses that support the industry such as caterers and equipment suppliers–many of which have shut down.

Shortly after being elected, L.A.’s new mayor, Eric Garcetti assembled the media to warn that Los Angeles’ declining entertainment industry, which is hurting California as a whole, is in a state of emergency. Insisting he is making this issue a top priority, he plans to push to expand tax credits to the industry to save as many jobs as possible. He expressed concern that Los Angeles’ renowned title as “movie capital of the world” will be tarnished if something isn’t done to preserve its continuing status.

In his quest, Garcetti stated one of his top priorities is to appoint a film czar at City Hall by this fall to tackle the problem. Analyzing the numbers from even the worst-performing study, he stated that for every $70 million spent on tax incentives, $5 billion in economic activity is created. Garcetti’s other ideas include providing credits to commercial shoots which help to preserve the infrastructure and jobs.

“We are going to fight a lot of fights. I know we are not going to win every single one of them. But if we don’t put a lot of strength toward winning a couple of battles in this war, we are just going to continue to be left behind on the battlefield,” he stated.

California’s current incentive program has been described by Variety as limited, though popular. A production can qualify for incentives if the budget ranges between one million dollars and $100 million. In fact, a lottery system has been created to fairly dole these credits. Some have criticized the lottery system because the uncertainty of procuring incentives makes it more difficult to budget films. Not to mention, it doesn’t apply to the larger blockbuster films, so they go elsewhere as their budgets exceed the $100 million limit. While Garcetti believes that the state’s $100 million tax incentive program isn’t enough, he argues it shouldn’t be unlimited. New York, for example, has a $420 million program.

Hollywood was once the land of production plenty–the shining mecca of entertainment industry opportunities. Can we return to the great boon of days gone by? Or is Hollywood a boondoggle of epic proportions? You, young actor, live here and have the most at stake. Would love to hear your thoughts!