Hollywood Pushes California Legislature For Filming Incentive Extension

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Lobbyists, including the Motion Picture Association of America, look to extend a $500-million tax credit to keep TV and film production in the state.

A coalition of Hollywood unions, moguls and lobbying groups are pushing the California state legislature to extend a five-year, $500-million tax credit to promote filming of TV shows and movies in the state. But the measure is getting push-back from some who feel the benefit to the entertainment industry is coming at the expense of college students, the sick and the poor, all of whom have seen government services cut as California faces a budget crunch.

The Los Angeles Times reports that the tax credit, which was originally passed in 2009 under Gov. Arnold Schwarzenegger, offers a rebate of up to 25 percent of qualified production expenses. The money goes to sales or business-use taxes, but isn't used to pay actor salaries.

The program was originally supposed to run through 2014, but $400 million in rebates have already been distributed. In order to keep the program going through 2012, an extension would be required.

Those opposed to the credit extension cite the hardships already being imposed on the state's education system as a reason not to devote further resources to the entertainment industry. The continuing economic difficulties across the country have led at least five states to end or suspend their filming incentive programs over the last two years.

Those in favor of the extension point to a study by the Los Angeles County Economic Development Corp. that found $3.8 billion had been added to the state economy, as well as 20,000 jobs, because of the tax credit. However, some question the reliability of the study, which was sponsored by Motion Picture Association of America.

The full extension has passed the Assembly, but the Senate has limited it to one year, provided the state reaches revenue targets through the rest of 2011. Those behind the extension may wait until the Legislature reconvenes in January to push for the full five-year extension.

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