Film Tax Credits Generate $1.07B for California Economy

Mayor Eric Garcetti calls the program, adopted last year by the state legislature, "an incredible boon" to Los Angeles, with $387 million in wages for below-the-line crew members.

Los Angeles Mayor Eric Garcetti said at a Fox Studios press conference Friday that the program of tax credits to arrest runaway film and television production initiated by his administration has already returned more than $1.07 billion in direct in-state spending, including $387 million in wages for below-the-line crew members.

"We are fighting back against runaway production, and this tax credit is delivering results for the heart and soul of the film and television industry — the people who swing hammers, run cable and serve food on set so they can pay the bills and contribute to our economy," Garcetti said. "Our film and television industry is the lifeblood of Los Angeles' middle class, and now production is coming back to where it belongs."

Garcetti delivered his remarks on Fox’s Stage 16, where the hit cable show American Horror Story, which formerly was produced in Louisiana, now is being shot. The mayor called the series’ return to L.A. "a prime example" of the tax credits’ success and said it was the first of 10 shows being filmed out of state that have applied for the tax breaks so they can return to Los Angeles.

According to Garcetti, the program recaptured $1.07 billion in less than a year and helped restore local film and television production to its highest level in five years. American Horror Story alone has so far generated $55 million in directing spending and created 4,000 in new paychecks.

"This is an incredible lift for our economy," Garcetti said, "and shows the program is working. We have the most talented workers, the most beautiful sets and the most creative people anywhere. We are grateful they’re here and their presence shows the tax credits work."

According to the Film L.A. agency, third quarter production in greater Los Angeles also is up 3.8%, which amounts to a record 4,308 days of TV production in L.A. So far, the program has dispensed $330 million in tax credits. A total of 22 projects have received tax credits in the first two application periods, including Veep, Westworld, and Twin Peaks.

State Senate President Pro Tempore Kevin de Leon, who took the lead in pushing the credits through the State Legislature, joined Garcetti for the announcement.

"These are major jobs," de Leon told THR. "The goal was to bring jobs back to California, to bring people who were separated from their families back to California. So far it’s proven to be a success."

"The reviews are in and everyone is raving about the film and TV tax credit," he said. "California, especially Southern California and Los Angeles were well known worldwide for its film and TV history. The sad reality was a lot of production was taking place elsewhere. We made a decision to put our foot down and to incentivize these jobs to come back home to California."

Also attending Friday’s events were 21st Century Fox chief executive James Murdoch, Los Angeles film czar Ken Ziffren, State Sen. Holly J. Mitchell, state assembly members Mike Gatto and Sebastian Ridley-Thomas, Los Angeles City Councilmember Nury MartinezJim Sharp, executive vp production for 20th Century Fox Television and Philip Sokoloskivp Integrated Communications at FilmL.A., Inc.