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Commentary by Assemblyman Scott Wilk
| Saturday, Apr 5, 2014

California is home to world class universities and technology giants such as Amgen, Google and Facebook.  But our most famous industry that we export throughout the globe is television and film.

Assemblyman Scott Wilk

Assemblyman Scott Wilk

The film industry provides more than 190,000 direct jobs and $17 billion in wages in California. Hollywood has become a staple for the entertainment industry and attracts visitors from all over the world.

Last year television and film generated over $30 million in revenue for Santa Clarita Valley. Our valley will be benefiting from the expansion of the iconic Golden Oak Ranch which is owned by Walt Disney Studios. Golden Oak Ranch served as the backdrop for the Disney classic move “Old Yeller” to Jacob’s cabin in my all-time favorite TV show “Lost.” The recently approved expansion of sound stages and facilities is projected to bring in $533 million in annual economic activity and 2800 jobs.

While this is good news for our community, overall the California film industry is in decline and has lost 36,000 entertainment industry jobs and $2.4 billion in wages over the last 17 years due to tax burdens and regulations that cause businesses to flee the state.

If we continue making it difficult for production companies to stay in California, we will not stand a chance against film industry competitors, such as New York and Louisiana.

In 2009, the California film tax credit program was established through legislation that was developed in order to allocate $100 million annually to film and TV production which are eligible for up to a 25% tax credit toward qualified production expenses.

These efforts were effective in the fight to keep some jobs in our state but the original film tax credit was not enough to save California jobs. Unlike other industries, TV and motion pictures can be filmed anywhere so we must keep that in mind and reevaluate the program to keep a competitive advantage and stay in the game.

In 2012, there were 54 large live action feature films produced and only one was exclusively filmed in California. This type of film making typically generates the most jobs and revenue, so local businesses paid the price for California’s industry burdens. Only 9 other films were partially filmed in California.

Last year, 348 productions who applied for the film tax credit were waitlisted and unable to receive benefits to keep their businesses in our state. When California has to turn film industry business away not only do the companies move their filming locations, but they take vendor contracts, revenue for our businesses, and industry jobs with them. These income generators would otherwise have fed into the California economy.

Accordingly, we have embarked on a new effort to help keep industry jobs in California. I am a principal coauthor of Assembly Bill 1839, the California Film and Television Job Retention and Promotion Act. This extends and increases the film tax credit eligibility, offering incentives for TV and film companies to stay in our communities and promote job growth.

This piece of legislation is a crucial lifeline for the film industry to keep us globally competitive and support business growth. AB 1839 removes the eligibility budget cap for feature films, but only allows for films to apply for up to $100 million of their budget for the credit. This will help keep bigger budget films in the state.

Last year, 21 of the 23 new primetime dramas were filmed in other states that have more “film friendly” tax incentives for entertainment industry growth than California does.

For decades, California was the home to one-hour dramatic television production and now New York is the lead filming location. A one hour network drama costs about $4 million per episode to produce, so you can do the math to see how much economic activity we’ve lost. AB 1839 would allow all one-hour television series, regardless of which network they are on, to be eligible for the program.

Overall, the California Film and Television Job Retention and Promotion Act extends the incentive program for an additional five years; includes a 5% increase in the tax credit for filming done outside the Los Angeles Zone; offers a 25% credit for television shows relocating to California in the first year and modifies the requirement that 75% of production days occur in California to 75% of principal photography days occur in California, all in order to ensure more jobs are created here.

The expansion of the film tax credit is a necessity to keep the iconic film industry in our own backyard. This unique industry will continue to serve as an economic resource as long as we support the industry and keep California competitive.

I’m committed to keeping the cameras rolling in California.

 

Scott Wilk, R-Santa Clarita, represents California’s 38th Assembly District.

 

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3 Comments

  1. Fred Arnold says:

    Amen Scott, this hits the mark. Keep jobs in our beautiful state!

  2. Kelly Unger says:

    Please bring production back home!!! Keep many employed so they can provide for their families!!!

  3. AMEN! Please bring it back home! Many will stay employed and be able to provide for their families!!! Many are so affected, more than we realize!!!

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