L.A. City Council Votes to Study Eliminating Fees for TV Pilots

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The motion, which was introduced by Council president Eric Garcetti and would cost about $300,000, is intended to encourage pilots to shoot in L.A. with the hope that if picked up, the series will be produced in the city.

The Los Angeles City Council passed a resolution Thursday to study whether it should eliminate many of the permit and use fees that television pilots have to pay to shoot in the city as a way to reverse the outflow of television series production in recent years, at a cost to the city of about $300,000.

The motion was introduced by City Council president Eric Garcetti who first proposed the idea about a month ago. Since then it has passed the council’s jobs committee. Now Garcetti has brought it before the full council and won approval for a study and report.

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“The idea is to waive those fees for pilots with the hope that pilots shoot here and then stay here if they get picked up,” says Julie Wong, Garcetti’s director of communications.

Garcetti’s idea is not just to eliminate permits issued by Film L.A. for shoots outside of studio lots, but also to eliminate such fees as those for street closures, for the use of public parks, for fire inspections and for the L.A. Police Department to provide security.

Garcetti expects the $300,000 cost to the city would eventually be more than made up for by tax revenues from productions that stay in L.A. as well as taxes paid by those who get jobs on the productions or as a result of the productions.

In 2009, after the TV show Ugly Betty left L.A. for New York, the Los Angeles Economic Development Corporation did a study which showed a one-hour TV show diretly creates 180 jobs and results in about 540 other jobs indirectly (from service providers, vendors, construction, materials etc.). For each one-hour show, the study found, the state gets $2.2 million in income taxes annually and about $880,000 in state sales taxes, a portion of which is returned to the city.

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The committee studying cutting fees for TV pilots is composed of the city’s chief administrative officer and representatives from the fire department, the department of parks and recreation, the department of transportation and from Film L.A., which is the group that collects permit fees.

Film L.A. reported July 3 that the decline in the number of TV drama series shot in Los Angeles is a “months long trend” which in the last quarter of the year resulted in “double digit losses due to changes in the production landscape.”

The TV category fell 15.4 percent compared to the same quarter one year ago with the TV drama category down 39.2 percent. Production of TV sitcoms, however, was up 35.6 percent “reflecting L.A.’s dominance in this production segment,” according to Film L.A.

The California tax credit subsidy program which provides $100 million annually does not cover network TV series because of the belief they will stay in state anyway. Cable TV series are covered, as are feature films.

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The reality is that the incentives offered by other states are having an effect, especially those in New York, which has a program that provides more than four times as much subsidy funding each year as California.

On Wednesday, the governor of New York signed a new law which greatly increases incentives for film and TV post-production facilities. Gov. Andrew Cuomo said that, “New York State’s program of incentives to attract film and television productions to New York has been a tremendous success, generating billions of dollars in economic impact and supporting hundreds of thousands of hires.”

Some cynics suggest Garcetti is doing this because he is running for Mayor of Los Angeles and wants entertainment industry support for his campaign. Wong says that this effort goes back to 2009 before he was running for mayor.

“For councilman Garcetti, bringing jobs back to Los Angeles and keeping jobs in Los Angeles are a top priority,” says Wong. “He is the chairman of the jobs and business development committee. He is also the councilman for Hollywood and has worked very hard to bring Hollywood the industry back to Hollywood the community. This is part of that effort."

On Wednesday, Garcetti also introduced a motion, which was passed, to do a study to evaluate how the city taxes radio and television broadcasting organizations. He wants to see if the city reduces or eliminates taxes for them if that will keep some here or bring more to the city, according to Wong.

Garcetti is also studying whether or not to eliminate gross receipt taxes on all businesses to keep them in L.A. or encourage others to relocate to L.A. Wong says Garcetti feels that tax is unfair because it is on all revenue, not just profits, so even if a business loses money it has to pay the tax.

On Wednesday, Garcetti announced that he has raised about $2.2 million so far for his run for mayor. The list of contributors includes well-known Hollywood personalities. Among the contributors are TV host and comedian Jimmy Kimmel, producer Steven Bochco and Showtime CEO David Nevins.