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How is California’s revamped film and television tax credit program fairing? Quite well, according to a newly released report from the California Film Commission.
The effectiveness of Program 2.0 in retaining and attracting in-state production is affirmed in the annual progress report, which offers comprehensive data through the third year of the expanded program. (Year-four of the program just started on July 1.) The report reveals that the redesigned incentives program, which launched in 2015, has led to sustained growth in crew employment, big-budget films, relocating TV series and state-wide production activity.
The program has helped increase the hours worked by below-the-line crewmembers in California. The third year continued that long-term growth trend with a 15.6 percent increase in hours worked in 2017 compared to 2014, the year before the new program took effect. That growth builds on 2016’s 12 percent increase over 2014.
The figures are based on data for below-the-line workers including Teamsters, IATSE members, Basic Crafts, etc. covered under the Motion Picture Industry Pension & Health Plans. In addition, Los Angeles-area sound stages are operating at near capacity, per FilmL.A., which is leading to substantial growth in construction for new stages and production facilities.
The tax credit initiative has also lured in more big-budget features over $75 million, which are often a target for the uncapped incentives offered by several other states and countries. During this past year, California attracted five additional big-budget films (Call of the Wild, Captain Marvel, Ford v. Ferrari, Island Plaza and Once Upon a Time in Hollywood). In total, the expanded tax credits have attracted 10 big-budget films.
Another category of projects that have seen a massive uptick is relocating TV series. It helps that they have their own dedicated allocation of tax credits. During year three of the program, California attracted two additional relocating TV series (NBC’s Timeless from Vancouver and Amazon’s Sneaky Pete from New York), bringing the relocating show tally to 15 over the past few years.
The new program has also prioritized lifting production statewide, meaning getting projects to shoot outside the production hub that is Los Angeles. During the first three fiscal years, tax credit projects spent more than $78 million in 19 counties outside the 30-mile zone. That figure is expected to rise as more tax credit productions in the third year (and even prior years) report their out-of-zone spending.
“Today’s report shows that Program 2.0 is working over the long-term to create high-quality production jobs and increase production spending in California,” said the California Film Commission’s executive director, Amy Lemisch. “While our tax credit is far more targeted than most, it does precisely what it was designed to do by keeping us competitive and reminding the industry that California has everything needed to provide the best value.”
A total of $815 million in tax credits have been allocated by the state during the first three fiscal years of the revamped program. The investment is on track to generate nearly $6 billion in direct in-state spending, up from $3.7 billion in spending through the second fiscal year. The latest $6 billion figure includes $2.25 billion in qualified wages and $1.89 billion in qualified vendor expenditures, along with $1.85 billion in other expenditures that do not qualify for tax credits. Collectively, productions that have been allocated tax credits under the program are on track to employ more than 18,000 castmembers and 29,000 crewmembers.
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