California Panel Moves Bill Increasing Aid to Hollywood

Photographer: Ken James/Bloomberg

The bill still must pass the Assembly and be approved by Governor Jerry Brown, a Democrat. Close

The bill still must pass the Assembly and be approved by Governor Jerry Brown, a Democrat.

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Photographer: Ken James/Bloomberg

The bill still must pass the Assembly and be approved by Governor Jerry Brown, a Democrat.

California lawmakers boosted a proposed tax credit for Hollywood studios to $400 million a year, four times the current level, to stem the flight of film and TV production to other states.

The plan, approved by the state Senate’s appropriations committee yesterday, would put California behind only New York in subsidies for films and TV shows. The state that spawned the modern movie industry in the 1920s now ranks behind New York, Louisiana, Georgia and Florida on that basis, according to a legislative analysis.

More than 40 projects sought and failed to win some of the $100 million California allocated for production subsidies last year, helping send $1.06 billion worth of work outside the state. That was more than double the $370 million of rejected productions that left the prior year, according to the California Film Commission, which administers the program.

“In the past decade that industry has been cannibalized by other states and countries that have poached tens of thousands of California jobs with lucrative financial incentives,” state Senator Kevin De Leon, a Los Angeles Democrat who heads the appropriations committee, said in a press release.

California’s tax incentives to film and television studios began in 2009 and have helped keep as many as 51,000 jobs from leaving the state, according to a statement from state Assemblymen Raul Bocanegra and Mike Gatto, Los Angeles-area Democrats who sponsored the original bill.

Mayors Lobby

The measure passed the appropriations committee, 5-0, and goes to the full Senate, which has until the end of the month to vote on it. The bill still must pass the Assembly and be approved by Governor Jerry Brown, a Democrat.

The mayors of California’s largest cities traveled to Sacramento this week to lobby Brown and legislative leaders to offer more tax breaks to Hollywood.

“This represents a responsible and significant investment in the future of California’s middle class,” Los Angeles Mayor Eric Garcetti said in a statement. “We need an enhanced tax credit program to compete and win against the other states and countries that are siphoning jobs and revenues away from California.”

The $100 million in film and TV subsidies now available from California represents less than 7 percent of the $1.5 billion that state analysts say is paid out to producers nationwide by participating states. New York tops the list at $420 million, followed by Louisiana at $236 million, Georgia at $140 million and Florida, with $131 million.

Current Program

California gives rebates amounting to 20 percent of qualifying production costs on a motion picture, and 25 percent for independent films or for TV series that relocate to California.

The state already has exhausted credits for the year that began July 1, according to the commission’s website.

The legislation was amended to allow larger Hollywood productions to qualify -- the current limit is $75 million -- and to guarantee credits for TV series that are renewed, according to the statement from Bocanegra and Gatto.

“The current incentive is insufficient, and forces California to turn productions away, along with jobs and revenues that should be here and supporting our schools, infrastructure and public services,” Garcetti said.

To contact the reporter on this story: James Nash in Los Angeles at jnash24@bloomberg.net

To contact the editors responsible for this story: Anthony Palazzo at apalazzo@bloomberg.net Rob Golum, Pete Young

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