California Extends $100 Million Tax Credit Bill
$400 million has already been committed to the program, which was extended through the 2014-2015 fiscal year.
Gov. Jerry Brown has signed the bill that extends California's Film & Tax Credit program for one year, through the end of the 2014-2015 fiscal year.
The bill had passed the Assembly and was approved by the state Senate in the final hours of the most recent session. There had been an effort to extend the tax credit program for longer than that, but it got caught up in the budget battle and in state politics.
The program to counter runaway production was first put into effecting 2009 and provides $100 million in tax credits annually for movie and TV production (with the exception of network TV series). The money is committed each year as soon as it becomes available on a day in June. As of now $400 million has been committed.
The program had been set to expire after the 2013-2014 fiscal year, even though several studies have said it is a success at retaining productions in the state. One study by the Los Angeles Economic Development Corporation (LAEDC) showed that the first two years of the Program has generated $3.8 billion dollars in economic activity statewide, created more than 20,000 jobs and over $200 million dollars in tax revenues. The report also found that for every tax credit dollar allocated so far, there has been more than $20 pumped into the economy.
Still, some legislators have argued that at a time the state is facing huge deficits, this is not the right way to spend limited funds. Backers have said it keeps work and jobs in the state at a crucial time.
Assembly member Felipe Fuentes, who has taken a lead in the efforts to extend the program, along with a coalition of labor and film industry leaders, applauded the governor's leadership in signing the extension. "By creating tens of thousands of jobs and pumping billions into our economy" said Fuentes, "the film and television tax credit program has truly been a statewide economic stimulus package."
"With the State's unemployment rate hovering around 12%, we need this incentive to help keep tens of thousands of Californians employed. Extending this program will prevent production companies from moving their projects, jobs and spending out of California," added Fuentes, who said he plans to re-introduce legislation for a longer extension in the next session of the legislature, which beings in January.
"Governor Brown and the legislature inked a solid win for California.," said Chris Dodd, chairman and CEO of the MPAA. "The extension of the motion picture production tax incentive means that California will continue to compete for motion picture and television productions, with tens of thousands of good middle class jobs for Californians. And we look forward to renewing the effort next year for a longer extension so that productions have certainty in the future of this important program,."
The extension was also praised by Los Angeles City Councilmember Paul Krekorian, a former state Assemblyman who in 2009 authored the first successful production tax incentive in California: "If our state government is serious about getting Californians back to work, we must be aggressive in preserving the industry that creates so many middle class jobs and supports so many local businesses both small and large. We must be willing to fight to keep the film and television production that is such an inextricable part of our identity, our history and our economy. We must never allow the day to come when we look up at the Hollywood sign on the hill and realize that 'Hollywood' is no longer here."
Bryan Unger, associate national executive director/western executive director of the Directors Guild of America, called the legislation "important" in keeping "the state ...a viable location for film and TV production."
"We commend the legislature and Governor Brown for recognizing that the motion picture industry is an integral part of the economic and cultural powerhouse that has been California during the last 100 years and that it is just as important a part of this state's future as its past," added Unger.
The passage was also praised by Jennifer Heater, government relations manager for the Screen Actor's Guild: "By increasing local work opportunities for 70,000 California SAG members and their entertainment industry co-workers, allowing them to live and work in the state they love and patronize local businesses, this legislation will help boost our state's fragile economy.."
Leo T. Reed, secretary treasurer of Teamsters Local 399 (which represents drivers, casting directors and others ) thanked the Governor for signing the bill, adding that the bill, "creates vitally needed jobs, economic infusion for both the State and local businesses, as well as working to keep one of the cornerstone industries of California where it belongs."
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