California Lawmakers Strike Deal to Boost Film Tax Credit

California Governor Jerry Brown and lawmakers struck a deal to more than triple the tax credit for Hollywood studios to stem the flight of film and TV production to other states.

The $330 million annual subsidy, announced yesterday by the governor’s office, is second only to New York’s $420 million in tax breaks for productions and outpaces incentives by Louisiana, Georgia and Florida, according to state analysts.

More than 40 projects sought and failed to win some of the $100 million California allocated for production subsidies last year, when $1.06 billion worth of work went outside the state, according to the California Film Commission, which administers the program.

The agreement “once again makes California a viable place to film the big-budget movies and TV shows that generate thousands of jobs and millions in revenue and spending,” Chris Dodd, chairman and chief executive officer of the Motion Picture Association of America, said yesterday in a statement. “It stands to bring billions of dollars into the California economy.”

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, both Los Angeles-area Democrats who sponsored the original bill.

Blockbuster Films

The deal eliminates a budget cap that excluded big-budget films from applying for the credits and makes them available to more TV shows as well, Gatto said.

“We’re trying to seek productions that employ the most Californians for the longest duration,” he said in an interview.

The mayors of California’s largest cities lobbied lawmakers earlier this month for a $400 million incentive package. It was reduced to $330 million after discussions with Brown.

‘Entertainment Capital’

“The heart and soul of the entertainment industry are the artisans, craftspeople and tradespeople who you never see on screen, and that’s who will benefit from this legislation,” Los Angeles Mayor Eric Garcetti said in a statement. “We are the entertainment capital of the world and this legislation will make sure it stays that way.”

Subject to the current annual cap, 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 the state.

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