In case you missed it, the August 17, 2014 edition of the The San Francisco Chronicle included this piece from the paper’s Editorial Board.
California needs to step up and refine its tax incentives for keeping television and film production in the state. For starters, its current lottery system for distributing $100 million in tax credits is an inefficient use of state resources. Requests for state support should be evaluated on the merits and potential for return on investment.
Assembly Bill 1839, now awaiting passage in the Senate, would expand and improve the program.
The measure has been moving through the Capitol with nary a dramatic twist. It cleared the Assembly 76-0, and moved out of the state Senate Appropriations Committee on a 5-0 vote.
Its fate probably will rest with Gov. Jerry Brown, who has served up more than a few surprise endings with his famous austerity streak.
But this measure, while certain to significantly increase the credits, would do so in a much more judicious way. For example, the 23 projects that received funding this year were randomly selected out of 474 applications. Many of those that did not receive incentives took their productions elsewhere.
Under AB1839, co-authored by Los Angeles-area Assembly Democrats Mike Gatto and Raul Bocanegra, about $400 million in tax credits would be allocated on their economic impact – including how many jobs they would bring.
In another big change, the bill would allow films with budgets of more than $75 million to receive tax credits of 20 percent. Those credits would rise to 25 percent for films produced outside of Los Angeles.
California’s big-city mayors have been lobbying for the measure, including Ed Lee of San Francisco, Chuck Reed of San Jose and Jean Quan of Oakland. Its appeal is obvious: The 2011 film “Moneyball” brought more than $1.7 million in local spending during its weeklong production activity in Oakland.
There is no question that California is losing business to states and countries where production costs are lower, the regulatory burden is lighter and tax incentives are richer. Feature film production in Los Angeles County has fallen by half since 1996. Its drop in TV pilot production has been even more alarming.
California cannot – and should not – try to match every low-cost locale in competition for the film industry. It has plenty of advantages that made Hollywood its home: from its great natural settings to its creative talent pool. But recent history has shown that it needs to make at least a reasonable effort to preserve film production here. AB1839 represents a wise investment toward preserving one of the state’s signature industries.
Read the full article here: