Governor Jerry Brown today signed legislation granting a two-year extension of California’s $100 million-a-year film and television tax credit program, which now will run until July 2017. Today was the deadline for Brown to sign the nearly identical Assembly and state Senate bills. Currently dispensed under a lottery system, California’s program was first introduced in 2009 to help stem the runaway production to other states with more generous incentives and lower costs. A total of 28 projects won a piece of the up to 25% tax credit program this June.
The Governor’s signing today comes after a summer in which lawmakers in Sacramento debated the effectiveness of the incentive, especially against the backdrop of the cash-strapped state budget. A study last year by the Los Angeles County Economic Development Corp fund estimated that in its first two years the state tax credits program generated more than $3.8 billion in economic output, supported more than 20,000 jobs and returned more than $200 million to state and local governments in taxes. Some, while supportive of the credit program, doubt that enough time has passed to yet gauge it’s effectiveness. “I think you need to have a full three-year cycle and then do the analysis in the 12 and 24 months following on a new tax-incentive program like California’s,” said an industry insider. “It takes time to see the change because you are not just trying to change how many productions you can keep or have but ultimately you are trying to change migration patterns. You’re moving a glacier.” Others think California has to get much more aggressive to keep Hollywood at home. “The next round would be to double down and to make the process easier,” says a studio number crunching source. “The pot is too small and the lottery system is too random to be able to rely on, that’s what still driving production out of state.”
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Despite a period of decline in the past 15 years as other states and nearby locations like British Columbia have introduced aggressive tax incentive and credit programs, California is still the number one place overall for filming and production in the country. Last year saw 284 movies fully or partially shot here and 276 TV series, according to the state film commission. That was a slight decline in film production from 2010 but a increase of 10 TV series. New York remains second domestically for production with 115 movies and 113 TV series made there in 2011. Pulling production away from LA and NYC, two southern states have lept up the production chain in the last decade. Louisiana and Georgia now take the third and fourth spots nationwide due to their hefty incentive programs, established infrastructure and heavy crew bases. Louisiana, who introduced its tax credit program in 2003, had 44 movies and 9 series shoot there in 2011 including most of Quentin Tarantino’s Django Unchained. While the number of TV shows stayed the same, last year was a drop from the 63 movies made across Louisiana in 2010. Georgia’s 2008 Entertainment Industry Investment Act offers a 20% tax credit of all production costs in the state on films or shows that spend more than $500,000. It offers another 10% on top of that productions that put the state’s entertainment logo in their credits. With Atlanta as its hub, Georgia had 24 films and 25 series in 2011. Teen Wolf was one of those shows but it will now be shooting in California thanks to getting a relocating TV series tax credit earlier this summer. One example that California’s program is having some success. The Peach state saw a decline of 5 TV series from the 30 shot there in 2010 such as the cancelled Past Life. Connecticut had 26 movies and 6 TV series filming in the state last year. Michigan, whose program went through some uncertainty due to a change in Governors in 2010, still had 24 movies and 5 TV series partially or fully shoot in the state last year.
However as the Association of Film Commissioners International locations show earlier this year revealed, other states and countries are working hard to get their hands on Hollywood work too. North Carolina, where The Hunger Games and season one of Showtime’s Homeland were shot, had 24 movies and 5 TV series made there over the course of 2010 and 2011 according to their film office. The state’s new incentive, introduced in January 2011, provides a refundable credit that’s equal to 25% of in-state production expenses for films and shows that spend at least $250,000. There is a cap on that of $20 million per feature. Incentive observers say that Colorado, Washington and Oregon could become big players over the next few years in the location game too. “It could take up to five years but with their proximity to LA, their topography that can be made to look like anywhere and the right political commitment, those states could start attracting some serious production,” said one insider. Oregon had 22 movies and 5 TV series, including Grimm and Portlandia,shot there in 2010 and 2011.