February 4, 2014
In response to the mounting competition California currently faces from nearly 40 states that offer financial incentives for TV and film production, Democratic State Assemblyman Raul Bocanegra plans to introduce new legislation this month designed to keep production in California. The proposed legislation would increase the state’s $100 million annual budget for TV and film tax incentives. Additionally, it would expand productions eligible for tax credits to include big budget films and network series.
“It may seem ironic that the home of Hollywood needs to persuade studios to shoot in the state, but budget-tightening in the past decade has led to a system where nearly all location decisions are based on how much cash states dangle before production companies,” reports Politico.
The article cites AMC’s “Breaking Bad” and its move from California to New Mexico, after being lured by generous compensation. “Republican Governor Susana Martinez of New Mexico ultimately signed a bill named after the series that offered any television shows or films shot on location in the state a 30 percent tax credit,” notes Politico.
“California is now just trying to recover the loss that was created by this tax war,” said Paul Audley, president of Film L.A., the non-profit that coordinates production permits in the Los Angeles region. “California is really just trying to restore its signature industry against an onslaught of free money from other states.”
New York earmarks $420 million per year for tax breaks for entertainment companies, while Georgia — which served as the location for the latest installment of “The Hunger Games” trilogy — offers $200 million.
“Do I think we need to compete dollar-for-dollar, California against New York? No. But we certainly need to be in the game, and right now, we’re not in the game,” said Bocanegra. “We became complacent… over time, while our program became outdated.”
California currently offers 20-25 percent tax breaks for TV and film productions, but the $100 million is typically claimed each year within days of being offered.