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New California Production Incentives Should Spur More Jobs in an Already Busy Hollywood

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LR-Steve Dayan-email

Steve Dayan
Steve Dayan

Production in Hollywood has been hopping for over a year, even before the newly enlarged California film tax incentives program kicked in on July 1. And expectations are that things will get much busier in coming months. “We ran out of people to dispatch during the latest pilot season,” said Steve Dayan, Secretary-Treasurer of Teamsters Local 399. “If it gets even more active, as many predict, because of the tripling in incentives, I think that it bodes well for our members, and it’s a very good thing for the industry here and in the rest of state,” he added. Dayan is also vice chairman of the California Film Commission that administers the incentives program.

“L.A. has been very busy for the last 18 months,” said Steven Poster, president of IA Local 600, the International Cinematographers Guild, noting that there wasn’t just more work for his members, but they also were higher-paying jobs. “Over the last year especially, with the incentives for television and now with the bigger ones becoming available, we’ve seen a tremendous amount of higher budget shows coming back here.”

The recent quarterly tabulation from FilmL.A., which issues shooting permits and is the official film office for greater Los Angeles, painted a mixed picture for the April-June period. Overall on-location shooting days declined 1.9 percent to 9,396. Despite the slight slippage, TV drama production rose 12.4 percent over last year’s second quarter, and shooting days for sitcoms, though a much smaller segment, jumped a whopping 94.2 percent. Digital web-based TV jumped 34.2 percent, while reality television declined by 13.7 percent. Feature production days remained essentially flat, rising only 0.6 percent for the quarter.

Steven Poster
Steven Poster

The report, however, did not reflect any of the impact of the $330 million in annual incentives which legislators in Sacramento and California Governor Jerry Brown have enacted for the next five years, up from $100 million in the previous lottery-based program. The $330 million started to become available on July 1. “The second quarter report is a rear view mirror and does not reflect any of the new projects expected from the new credits,” declared Paul Audley, who heads FilmL.A.

A continuing ramp up in shoots, especially for TV, “is what we are anticipating,” he noted. “We have 11 new television projects as a result of the first round of new tax credit allocations. And four of them are relocating series coming back from other places.” Veep and American Horror Story are among the shows returning to the Southland.

Last week the California Film Commission announced that 254 projects had applied for the second round of the enhanced film and television tax credits. “It’s pretty much what we anticipated,” said Amy Lemisch, executive director of the California Film Commission. “Since the beginning of this program there has been a great demand for credits from producers who really want to shoot here.”

Under the new program, features with budgets over $75 million now qualify for tax breaks up to $20 million. For the $48.3 available for studio films in this round, there were 32 applications. Meanwhile, for the much smaller pool of $6.9 million in funds allocated for independent projects, there were 222 applicants. Some concern has been expressed that independents may get squeezed out under the new incentives because big budget films will sop up the lion’s share of the funds.

“You will see relatively few projects claim a lot of the money because feature films will consume a larger share of the allocated funds,” noted FilmL.A.’s Audley. “Larger projects have such a strong spending and jobs impact that they are going to be looked on very favorably. My question is what effect will this have on independent films and films with a smaller budget? Will they continue to locate in Los Angeles even though they might be competitively priced out of the new incentive program?”

The new program assesses applicants based on a “jobs ratio score,” which ranks projects based on wages to be paid to below-the-line crew workers and how much will be spent for equipment and payments to local services vendors. The new provisions make for new and more detailed information that must be filed.

“Given that this is the first year of the program, some producers may not understand it fully, and may not be able to take advantage of it in the first year,” said Dayan. “While this is going to be a very good year, it’s going to get better in year two once people understand it better.”

The legislation passed in Sacramento includes strict reporting requirements so that the incentive program produces promised benefits in more and better paying crew jobs and in spending that stimulates the economy. “You have to do your due diligence and make sure it works,” the Teamster official noted. “There are a lot of criteria. The program was set up smartly but the proof will be in the pudding, once we see how many projects come back, and what the numbers will show.”

“I believe that in the end this is going to be good for my members and I think for the town,” he added. “We’ve gone through some difficult times and it’s time for our people to have their moment in the sun.”

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