Variety has an extensive piece on the new Los Angeles Mayor’s push to increase tax incentives for the film industry. Mayor Garcetti is concerned that California’s current tax credit programs are much smaller than those in other states and that as a result, film productions are declining in the state. Variety reports:
The California Film Commission recently released a sobering report concluding that the state “continues to experience a pronounced erosion of this signature industry.” Although the state’s incentive program has recaptured lower-budgeted features, TV movies and basic cable dramas, California is losing out big on network TV dramas and feature films. Many local businesses that support production have closed or been forced to lay off workers, and the trade unions report high levels of unemployment among their California members, according to the study.
The article goes on to describe the history of the existing incentives, how they compare to other states, and a discussion of the costs. It concludes with an insight into what Mayor Garcetti would like to propose the legislature do:
Garcetti would like to see a no-cap credit and to have it expanded to premium cable, commercials and visual effects. But even though lawmakers voted for an extension of the credit last year, a bill to provide $15 million in incentives for commercials stalled out this year. He’s also open to other ways of attacking the problem, like establishing tax breaks at the county level, although he warns to “not kid ourselves” by thinking state level incentives don’t pack the biggest punch. It will be essential to “humanize” the issue and make it relevant to “an assembly member from Eureka and a state senator from San Diego,” he says.
What the article and the Mayor fail to account for is the recent elimination of California’s Enterprise Zone program which encompassed many areas in which the film industry operates. Mayor Garcetti is rightly concerned about the multiplier effect of the film industry, all of the support businesses that operate in its orbit to support the production activity. Many of these businesses relied on the Enterprise Zone program to remain viable and are at risk with the loss of the program and the decline of local production.