Big changes could be coming to California’s annual $100 million film and TV tax credit program next year. “Entertainment is important to the state, it is billions of dollars of revenue to the state but the reason we do a state tax credit is jobs”, said state Assembly Committee on Arts, Entertainment, Sports, Tourism and Internet Media chair Ian Calderon this morning during an oversight hearing at SAG-AFTRA headquarters. “We took a baby step, we need to take a larger step — we are California and we are losing our signature industry,” the Democrat added of the program first introduced in 2009 to stop runaway production. That larger step could see the next bill placed before the Legislature in Sacramento with millions in additional funding, I’m told. There is also talk in political circles of extending the program for five years instead of the usual two. Perhaps most significantly, the committees today openly talked about reorganizing the way the tax credit works to remove current limitations such as the cap that prevent films budgeted at more than $75 million from being eligible. “The UK is killing us in terms in getting our tentpole movies shooting there,” said California Film Commission Executive Director Amy Lemisch. She also noted how Vancouver and incentive-rich states such as Georgia and North Carolina are getting the bulk of the blockbuster business.
Co-chaired by Raul Bocanega of the Assembly’s Committees on Revenue & Taxation, the progress report hearing also heard from labor and business leaders. Surprisingly, newly appointed LA Film Czar Tom Sherak was not in attendance. With the exception of Warner Horizon TV’s SVP of Production Kevin Fortson, also absent were reps from the studios and broadcasters. Speaker after speaker asserted that the program needed more money and the certainty of long-term stability.
Related: Tom Sherak Q&A
Gov. Jerry Brown signed the last two-year extension of the program in the summer of 2012, funding the program until 2017. In June of this year, 31 film and TV projects were picked via lottery to receive funds from the tax credit program — exhausting the program in one day. “It is not an effective way to run an economic incentive program,” Lemisch told the committees. “We don’t have enough in the pie, we don’t have enough to accommodate the demand. It’s really all about the money,’ she added.