Scott Wilk: Don’t Close The Curtain On Film Tax Credit
Scott Wilk | SCV News
This past Sunday, more than 1 billion people around the world tuned in to see A-list actors, directors and producers as they walked down the red carpet on their way into Hollywood’s Dolby Theatre for the 85th Academy Awards. The Academy Awards celebrate the best the film industry has to offer.
When the evening ended, “Argo” was named Best Picture. “Argo” was primarily filmed in Los Angeles, but it was one of only two Best Picture nominees filmed in California.
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The film and television industry is extraordinarily mobile. Productions can be set up anywhere, and many producers are choosing to set up productions outside of California.
In 2003, more than 66 percent of studio feature films were shot in California. In 2011, that number dropped to less than 40 percent.
Other states have seen rapid growth in their film industries because of generous tax incentives and lower overall production costs. In fact, Louisiana reaped more than $900 million in film production last year.
In 2002, only five states in America offered film and television tax credits. Today, 40 states offer them.
California has offered a film tax credit since 2009. The program was recently extended through 2015.
According to a study by the Los Angeles Economic Development Corp., for every dollar the state invests in film tax credits, it receives a rate of return of at least $1.13. Who wouldn’t jump at the chance of a 13 percent return on investment?
In a UCLA study, 90 percent of film producers said film tax credits are likely to directly influence their decision in where to film. We must keep these productions here in California because it will benefit our state economically.
Sacramento must do more when it comes to keeping the film and television industry in California.
Two main problems currently exist with the way California currently operates its film tax credit program:
First, the program is not large enough. It only serves one in five applicants. California offers only $100 million in film tax credits, but the California Film Commission reports they receive $400 million to $500 million in requests each year. This creates a complicated lottery system where producers must wait until the beginning of each fiscal year to find out if they have been awarded the credit. Many producers cannot wait until the lottery takes place and they move their productions to states where the credit is guaranteed.
California needs to increase the size of our tax credit program to at least match what is offered by other states. New York now offers more than $400 million in film tax incentives.
Second, the film tax credit should be authorized for five years so producers of television series know they will receive the credit for the life of their series.
FilmLA, a nonprofit community benefit organization that coordinates permits for filming at locations throughout Los Angeles, reported that television production was down 3.4 percent in 2012, but filming in the critical television drama category was down 20 percent. FilmLA’s President Paul Audley said, “Unfortunately, last year we saw a record number of new TV drama series shot out of state, resulting in negative economic consequences.”
According to the Los Angeles Times, only two of the 23 new TV dramas launched this season are being filmed in Los Angeles County.
Audley continued: “Last year saw our industry rocked by dramatic changes in the local production landscape. If we seek a more secure future for filming in Los Angeles, we must continue to expand upon the programs proven to attract new projects to California.”
The film and television industry is one that my fellow legislators in Sacramento should vehemently defend. California is home to hundreds of thousands of people who rely on the success of the local entertainment industry for their livelihoods. We must be committed to fostering a better business climate for the film and TV industry so that it can stay home in California.
Scott Wilk, R-Santa Clarita, represents the 38th Assembly District, which includes Simi Valley, the northern section of the San Fernando Valley and most of the Santa Clarita Valley.
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