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Hollywood Petitions California Legislators for More Film and TV Tax Incentives

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Labor and business reps come to a rare agreement on the need for money to retain jobs at a Los Angeles hearing, also attended by politicians and economists.

More money. That is what the state of California needs to provide in incentives to keep movie and TV productions in the state at a time when there is significant competition from other states and countries -- according to politicians, business and labor representatives, and economists.

They were speaking at a joint oversight hearing of two California Assembly committees held at SAG-AFTRA headquarters in Los Angles on Wednesday.

"It just seems like a no-brainer for us to expand the pool of money," Ruben Gonzalez, vp public policy and political affairs for the L.A. Area Chamber of Commerce told the committee members, "rethink the regulations, rethink the cap (on how much any one production can receive) and have it set for a longer period than the few years we do now. The one thing every business needs is certainty when they invest."

"Behind the glitz and glamor of the Hollywood lights, there are real people -- hard-working men and women who make the regular people into stars," said Rusty Hicks, political director, L.A. County Federation of Labor. "Keeping Californians working in California is something we can all agree on," added Hicks.

Amy Lemisch, executive director of the California Film Commission, noted the $100 million in tax credits allocated each year to retain movie and TV productions is all spent in one day, with many of the eligible projects left on a waiting list or unfunded.

"It's not an effective way to run an economic development program," said Lemisch.

Lemish said the most lucrative form of entertainment production in terms of what it contributes to a local economy are TV series, and the California program doesn't include network series, only basic cable series. That is because the program, when created in 2009, was focused on those forms of entertainment they felt could be retained through the program.

California Senator Ted Lieu said one problem is that legislators from Northern California often resist expanding the program because they think it is really focused on Southern California.

Lieu said there may be a need to redefine entertainment to include things like the video game industry and postproduction. "It's something to think about strategically," added Lieu, "whether we can strategically craft a bill" that would make the entire program more attractive throughout the state."

Kevin Klowden, managing economist at the Milken Institute, noted that the state of New York, which spends $420 million a year to lure productions, gives an extra 5 percent incentive to programs that move production outside New York City to other parts of the state, and that might work in California as well.

Assemblyman Raul Bocanegra, chairman of the Assembly Committee on Revenue & Taxation, said they must make changes. "There is a large bipartisan group (in the legislature)," said Bocanegra, "that would like to see this signature industry stay in California and keep the good-paying jobs here in our state."

Bocanegra chaired the hearing along with Assembyman Ian Calderon, chairman of the Assembly Committee on Arts, Entertainment, Sports, Tourism & Internet Media.

"The reason why we do a film tax credit is for jobs," said Calderon. "We want to make sure we're empowering the middle class."