The state of the entertainment industry is strong overall, but the state of the industry in California is in serious trouble and our Film and TV Tax Credit program just isn’t cutting it, politicians and studio execs said today at the Hollywood Chamber of Commerce’s second annual State of the Industry Conference. “We need a game changer; this is a very incremental approach,” Paramount Studio Group President Randy Baumberger said of the annual $100 million lottery system program. “Virtually no feature films are shot in LA anymore. What producers need are commitment and consistency. What producers are looking for is to be able to plan out 3 or 4 years,” he added during a panel on keeping jobs in California. “They can’t plan for a lottery on one single day. We need to be able to look out a year in advance and say what is the cost structure for that film. California is at a disadvantage by having all of the money gone in a few hours.”

Politicians Eye Major Upgrade To California Film/TV Tax Credit
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The shortcomings of the state’s current program and the job losses the industry is experiencing in California were the primary topics this morning as speaker after speaker lamented rising runaway production, the ineligibility of tentpoles and network TV for the credit and the much heftier incentives of states such as Georgia, Louisiana and NY. “We need a bigger pot of funds,” said Amy Lemisch, the state’s Film Commission Executive Director. “We are not meeting demand.” Introduced in 2009 and signed for another two-year extension by Gov. Jerry Brown in 2012, California’s program will run until 2017 but is set to expire next year. The program has attracted a lot of non-industry attention in recent weeks due to the revelation of a FBI investigation into bribery and influence peddling on the part of state Sen. Ron Calderon, D-Montebello, who allegedly took thousands of dollars to change requirements in the program.  

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Recent hearings in Sacramento have suggested that efforts to increase or extend the program will be a part of next year’s legislative agenda. Assemblyman Raul Bocanegra, D-Pacoima, chairman of the Revenue and Taxation Committee, assured the crowd at the Loews Hollywood Hotel that state lawmakers would move forward to increase the tax credit program. And Assemblyman Adrin Nazarian, D-Sherman Oaks, whose district includes the San Fernando Valley and Hollywood Hills, told the audience that “conversations are taking place now” to get an increase and an expansion to the program. Nazarian recently introduced two bills in the state Legislature that would expand the program from another two-year extension to five years, remove the cap that prevents films budgeted at more than $75 million from being eligible and increase its funding to $150 million for the first year and to $250 million for the remaining four years. “I don’t know if we need to compete with New York dollar for dollar,” he told me. “What we need to do is find the sweet spot to keep jobs and production here.” New York currently offers the country’s top Film/TV tax credit program, with annual incentives of more than $430 million.

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