Governor Brown Renews California Film & Television Tax Credit Program
California Gov. Jerry Brown on Sunday put his signature at the last moment on a two-year extension of the state’s $100 million a year film and television incentives program, ensuring that it continues into 2017.
Designed to bolster the state’s all-important entertainment economy from the predations of so-called “runaway production,” the renewal of the California Film & Television Tax Credit Program elicited loud praise from the broad coalition of Hollywood studios and guilds that had worked hard to get the bill passed.
“We commend the legislature and Gov. Brown for recognizing that the motion picture business is an integral part of the economic and cultural powerhouse that has been California during the last 100 years,” said a statement issued by entertainment industry unions including IATSE, the Teamsters, the Directors Guild of America, and the newly merged actor’s union, SAG-AFTRA. “Unlike most other industries, ours is a highly mobile one – film and television production can be shot anywhere,” the coalition statement continued. “Because of that reality, thousands of our members who live in California and want to work in California are dependent upon this state remaining competitive. We know firsthand that this program has created employment opportunities for them, and with that, health and pension coverage for them and their families.”
“The two-year extension of the state’s production tax credit will keep California competitive for tens of thousands of production-related jobs,” said Chris Dodd, chairman of the MPAA (Motion Picture Association of America), the trade industry organization for the big entertainment industry companies. “This is an important victory for California’s economy, our national economy and the hardworking men and women who comprise the film and television industry.”
“We’re not talking about A-list movie stars or Hollywood moguls,” said Sen. Ron Calderon (D-Montebello), who authored the Senate legislation. “The beneficiaries of the tax-credit program are the behind-the-camera workers — the grips, caterers, dry cleaners and ‘the little people’ who, at the end of the day, pay their bills at the kitchen table.”
Brown on Sunday also signed an almost identical bill authored by Assemblyman Felipe Fuentes (D-Sylmar), which also extends the incentive legislation by two years. Both measures passed California’s senate and assembly on August 31 by overwhelming votes.
California offers a 20 to 25 percent credit toward qualified production costs, which employers can use to offset any business tax liability they have with the state. The $100-million-a-year incentives program is considered somewhat skimpy compared to the kinds of financial inducements offered by other states led by New York (nearly 40 have some plan in place, though many are currently under fire for allegedly not delivering enough benefits in return for the tax breaks) and a slew of foreign countries, most prominently Canada. But it’s as big a program as the legislature was realistically able to pass and get signed, given criticisms from some quarters, especially the teachers unions, that this was an unneeded handout to the already wealthy,
A three-year version of the incentives plan first went into effect in 2009, after legislation was passed when actor Arnold Schwarzenegger, a forceful proponent of the measure, was still governor. Last year Brown was willing to sign only a one-year extension.
The California Film Commission, headed by Amy Lemisch, administers the incentive program and hands out the money for qualifying productions each year in early June. Winners are determined by a lottery, because there are far more applications than available funding. All the money gets disbursed in a single day in early June. Only 28 of more than 330 applicants were initially chosen in the most recent June lottery.
Applications for the next fiscal year’s $100 million allocation of tax credits will be accepted starting June 1, 2013. Since it was enacted in 2009, the program has “helped keep scores of productions and tens of thousands of jobs in California,” according to the film commission. Based on spending estimates by approved film and TV projects, “the program is responsible for generating an estimated $3.9 billion in direct spending statewide, including $1.3 billion in wages to 27,000 ‘below-the line’ crew members.”