CALIFORNIA FOCUS
FOR RELEASE: TUESDAY, MAY 20, 2025, OR THEREAFTER
BY THOMAS D.
ELIAS
“A GIVEAWAY
CALIFORNIA MUST EXPAND"
It’s very rare
for a giveaway program to more than double and nevertheless merit plaudits.
But that is the
case with Gov. Gavin Newsom’s current plan to up California’s film and TV tax
credit program from the current $330 million a year to $750 million.
This plan seems
about the only way to assure that California will remain the preeminent place
to make and refine the cultural and entertainment content that represents
America most in the world marketplace of ideas.
It also seems the
only way to make sure most of the ancillary jobs that accompany actual film and
television production also stay home. For there is no guarantee the
post-production facilities which now dot the Southern California landscape with
film editing shops, sound editing studios and composers’ quarters – among other
items including costume rental shops, caterers and many more – will stay here
forever when movies are being made in faraway locations as disparate as Georgia
and British Columbia, to name just two places whose tax credits currently top
California’s.
One of the main
draws for businesses moving to other states has long been the property tax
exemptions they are offered by many states – no levies for the first 10 years
or so in Texas, for just one example.
The pull of tax
credits is just as influential for entertainment production. Filmmakers don’t
have to move, not when California contains almost every kind of location, but
they will when other states and some Canadian provinces make it worth their
while. Here are some of the latest numbers:
English language
scripted films and TV shows being filmed in the Los Angeles area fell by 19.7
percent in 2023 compared with the previous year, reports Film LA, which tracks
regional production. California’s share of the world’s productions fell from 22
to 18 percent during that short time.
This is no
formula for continuing dominance of an industry once completely synonymous with
California. Right now, this state’s biggest competitors include Georgia, North
Carolina, New York and several Canadian provinces like British Columbia and
Ontario, where late-model, high-tech studios have been built in both Vancouver
and Toronto.
So now comes
Newsom with a necessary move. He seeks to more than double what the state has
lately offered. Do those offers matter?
“You follow the
money,” actor-director Ben Affleck told a reporter when explaining a few years
ago why he filmed “Live by Night” in Georgia. Tax credits and incentives
sometimes cover as much as one-third of production costs in an industry where
profits are not guaranteed. For the states, this can produce new jobs and more
government revenue without the environmental problems of factories and
warehouses.
What’s more,
California’s current $330 million is puny beside what other states spend.
Georgia, for example, plans to give $1.08 billion in movie and TV tax credits
this year, rising to $1.28 billion in 2028.
So if California
legislators balk at what Newsom now proposes, they just might doom California
filmmaking to dinosaur status.
Don’t bet on that
happening. The current proposal calls for production companies to get back 35
percent of what they spend for costs incurred inside California. This includes
short TV shows as well as full-length films. Even animated shows are included, so
long as their budgets are over $1 million.
John Prabhu, a
partner at LA North studios and a supporter of the boost in tax credits, told
Daily Variety that “Not a day goes by when someone fails to knock on our
door…Before it’s too late California must intervene so we don’t lose the
entertainment industry for good along with the quality jobs it provides.”
The bottom line
is that when entertainment production leaves the state, money departs, along
with jobs and talented professionals. That’s why the expanded film credit is
needed now, with the strong likelihood it will have to be bumped up further
every year for the foreseeable future.
It’s OK to
criticize Newsom on a lot of fronts. But he occupies the high ground on this
one and whoever succeeds him in 2028 will have to act similarly.
-30-
Email Thomas
Elias at tdelias@aol.com. His book, "The Burzynski Breakthrough, The Most
Promising Cancer Treatment and the Government’s Campaign to Squelch It,"
is now available in a soft cover fourth edition. For more Elias columns, visit www.californiafocus.net
Suggested pullout
quote: “If California legislators balk at what Newsom now proposes, they just
might be dooming California filmmaking to dinosaur status.”
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