The Golden State saw a loss of production spending to other states and countries more than double last year from the year before, the California Film Commission said today. According to the CFC’s annual Progress Report (read it here), more than 40 projects that applied for but did not receive a piece of California’s $100 million Film and TV Tax Credit program last year ended up spending $1.062 billion outside the state in territories that offered incentives. That’s a record loss to the state since the tax credit program was introduced in 2009 and a $722 million leap over the $370 million spent outside California in 2012-2013 on projects that missed being picked in the tax credit lottery. And here’s the thing: that $1 billion plus figure doesn’t take into account projects that didn’t even apply for the incentive last year – like tentpoles with budgets over $75 million, which are ineligible for the current program.

ca-film-commission__140602221837Still the report wasn’t all bad news — though there was a lot of that within its pages. With $700 million in tax credits allocated since California introduced its incentive program, today’s report estimates that has led to $5.39 billion in total aggregate direct spending. The CFC document adds that includes about $1.72 billion in below-the-line wages. But as anyone in the industry who has seen a friend or family member relocate to Georgia or up to B.C. for five months, it is not stopping the flood.

“It is clear that demand for California tax credits far exceeds supply,” says the dense 32-page report. “Without adequate funding for the Tax Credit Program, California will continue to lose direct spending and tax revenues from film and TV productions that choose to film elsewhere,” it adds. In total, a record 42 tax-incentive-denied projects moved out of state in 2013-2014, while the 26 projects that did elect to film in California spent $211 million in the state. The lottery this year on June 3 ultimately saw 26 projects selected for this year’s incentive allocation out of a record 497 applications.

Brianna Barnes
5 months
Amen John! My husband has done three, going on four movies in a row out of state....
john kelso
5 months
That was a hundred years and 5 generations ago. This in not a story about E-Ching, this...
john kelso
5 months
Sorry mystery, New York is wiping LA out in the television dept also. Read the latest stats....

All of which means, even with multi-sponsored legislation to expand the tax credit making its way through the state Senate, expect to see that $1.062 billion runaway production spending figure likely hit another new high next year.