A GIVEAWAY CALIFORNIA MUST EXPAND

 

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.

 

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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.”