Reforming California's Film Tax Credit Program

For most of the past century, California, and particularly the Los Angeles region, has been the undisputed World Capital of the Entertainment Industry.  And while this title is often associated with the glitz and glamour of high-society celebrities and the iconic Walk of Fame, the entertainment industry is the largest employer in our region and supports the livelihoods of hundreds of thousands of middle class people.  But now that livelihood is threatened as is our regional and state economy.

Financial incentives offered by other states and countries, have lured film and television production away from California.  For example, between 2008 and 2009, feature filming days declined by 30 percent.  And while 1-hour basic cable television shows have increased 48 percent from 2005 to 2012, California’s market share of these productions dropped 48 percent.  During this same period, California’s market share for network show production declined a staggering 58 percent. 

It is not surprising that the precipitous drop in film and television production has coincided with the aggressive, predatory practices by states such as Louisiana, Georgia and New York and countries such as Canada and Britain.  Since creating tax credit and rebate programs, film and television production spending in Louisiana topped $700 million, an 800 percent increase since the state began its tax credit program.  Georgia reported $880 million in film and television production spending, a 600 percent increase since their tax incentive program was created.  Georgia also reported that the state’s film industry created $3.1 billion in economic activity and 5,000 directly-related jobs.  In 2012, New York reported a record number of television productions. 

While California’s own film tax credit program, created in 2009, has proven effective by recouping a fraction of the runaway production losses of the last decade, our program is still far too insufficient to compete against the other incentive packages.  We have still lost 90,000 middle class jobs and $3 billion in wages. Many of our local small businesses that rely on a healthy local entertainment industry have been deeply impacted.  Our workforce now finds they must follow those productions across the country in order to make a living.  This means sacrificing time with their families or giving up on California and moving.  However, in many cases, people are now just unemployed. 

We cannot stand by and let one of California’s iconic bedrock industries be victimized by the predatory practices of other states and countries.  We must stem the flow of runaway production, and then support industry growth with the goal of reclaiming California’s position as the World Capital of the Entertainment Industry.  This is why reforming California’s film tax credit program will be one of my top priorities this legislative session.  I look forward to hearing your thoughts.

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Richard Bloom for Assembly 2018

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