LOS ANGELES—California has a lot to offer the film industry: great weather, a beautiful variety of landscapes and a large population of individuals eager to get their big break. However, one of the most important items (if not themost important item) on the list of desirables are film credits.
“Today’s business model for motion picture production is such that studios and independent producers count on tax incentives as a way to keep costs down,” said California Film Commission Executive Director, Amy Lemisch to Canyon News. “The vast majority of companies only shoot their projects in those territories that offer financial incentives.”
The California Film and Television Tax Credit Program allotted $100 million annually. According to Lemisch, the program funds for the new fiscal year (July 2010-June 2011) have already been exhausted. “We have more applicants than there are credits available to allocate. We maintain a waiting list for any funds that may become available from other projects dropping out of the program for a variety of reasons.”
When compared to New York, which has dedicated $420 million to its program for the next four years, California just doesn’t have enough funds to support the demand. In regards to competition, Lemisch stated, “In addition to the international competition from Canada, Australia and most EU nations, over 40 U.S. states offer meaningful incentives to the film industry successfully luring production and post-production jobs and spending away from California.”
Such fierce competition has had a significant impact on the industry on the Golden State. Lemisch claimed the Los Angeles area had experienced a “steady decline in feature film production days in 11 out of the last 13 years” with 66 percent of studio feature films filmed in California in 2003 dropping to 38 percent in 2009.
Hence, the birth and implementation of California’s film and television tax incentive program. “The program was enacted as part of a targeted economic stimulus package to increase production and spending, jobs and tax revenues in California,” explained Lemisch. “The program, which launched in July 2009, specifically targets productions that are most likely to leave the state due to incentives being offered in other states and countries. It has enabled California to be competitive and to keep many of those at-risk films in state.”
According to reports, the $300 million in tax credits presently reserved/utilized has resulted in a total aggregate direct spending of $2.2 billion as well as $728 million in wages paid/to be paid by affiliated projects.
Lemisch pointed out that Film L.A. released a statement announcing in 2010 that “feature film production posted a 28.1 percent fourth quarter gain and a year-over-year-gain of 8.1 percent.” The organization claimed that the tax credit program was responsible for 26 percent of local feature production for 2010, which, according to Lemisch, indicates the incentives are having an “immediate impact on production levels.”
Despite increases in production levels, California continues to lose film and TV projects on a weekly basis to other regions offering incentives. “There is a constant flow of productions leaving the state. One studio told me that 90 percent of their pilots this season will be filmed out of state,” claimed Lemisch.
At this time, there are no discussions to allocate additional funds to the program in the short term.
Recent project participants include “The Social Network,” “Justified,” “Terriers,” “Faster” and “You Again.”