California News

Hollywood pushing for tax break extension

Tuesday, May 01, 2012

For so many decades, California was the place for movie and television production. But the Golden State has lost its touch, with production crews going to cheaper states - even cheaper countries - where they're offered millions of dollars in tax breaks. They take with them jobs and other economic benefits.

"There are 100 movies shooting in Louisiana right now, and they're projecting that it's billions of dollars in spending that's taking place there," said Steve Dayan of the California Film Commission.

The California Film Commission met to discuss how successful the five-year $100 million-a-year tax credit has been going. Production companies can use up to 25 percent of qualified expenses to offset taxes that would have otherwise gone to state coffers.

The program is so popular, there's typically a waiting list.

"These are grips, electricians, camera people, drivers. These are people paying taxes in-state. It is a great economic driver," Dayan said

In fact, the film commission is now pushing for another five years of tax credits through 2018 to keep California competitive with other states that offer bigger tax breaks.

But while Hollywood tries to hang on to its legacy, critics say it comes at the expense of other programs that need to be funded. The industry argues that the tax breaks pay for themselves.

A recent UCLA study concluded those breaks are providing some economic benefit, but not as much of a return to taxpayers as originally claimed. For every dollar in tax subsidy, the state recouped $1.04.

Public schools budget adviser Kevin Gordon questions whether the tax breaks are a wise use of limited public money.

"When you take a look at the disinvestment we've had in public schools and the kind of budget cuts that schools are up against, that tax credit over the life of the time they're talking about, in total, adds up to a billion dollars," Gordon said.

Lawmakers have until fall to act on the tax break.

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hollywood, movie news, california state assembly, california state senate, california news, nannette miranda
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