A bill that would drastically increase California film and TV tax incentives to $330 million was passed in both the Senate and Assembly on Thursday.
Senate Bill 144, authored by Senator Anthony Portantino (D-La Canada Flintridge), would increase tax credit allocation for qualified movie and television show productions, with a credit percentage increase given when production diversity goals are fulfilled. In total, $180 million would be added to the current film tax credit program, with $150 million going to a new sound stage construction incentive to help bring in new productions on a long-term scale.
The added funding would be divested through the next several years, with $15 million of the funds being earmarked for TV series that relocate to California for the 2021-2022 and 2022-2023 fiscal years, and $75 million to be allocated to recurring TV series each year.
$150 million would be specifically added to a new credit that would give a figure equal between 20%-25% for studio construction over the next ten years. An additional 4% is to be added when diversity goals are either met, or if there had been a “good faith” effort to meet the goal. SB 144 would provide that the credits be allocated by the California Film Commission in the same manner and time period as the existing motion picture credit. The Commission would also submit an annual report to the legislature noting what the diversity goals are based on the aggregate number of jobs in the industry.
In total, the state would add around $90 million each year to the states current film and tv production incentives.
Senator Portantino wrote the bill largely to help bring back film and TV production to California, building on previous incentives in the last few years that brought back dozens of productions from other large areas that had previously taken away billions of production spending from California, such as Georgia, Florida, New York, Toronto, British Columbia, and the Czech Republic.
“California’s successful film tax credits have moved dozens of productions back to where they belong and created thousands of good-paying middle-class jobs,” stated Senator Portantino on Thursday. “SB 144 creates a dynamic economic development package for California’s important and historic film and television industry. Investing in sound stage construction and the creation of studios and filming locations is a critical addition to our efforts in increasing filming in the Golden State. By investing in the expansion and modernization of studio infrastructure, we can ensure that another generation of entertainment careers will be created in California.”
“Let’s bring a core historical industry back to California.”
Senators, Assembly members unanimously approve SB 144
While the film tax credits have typically cost the state around $1.1 billion every 5 years since tax credits were first significantly boosted in the wake of the Great Recession, the film tax credit program has, in turn, generated $17.9 billion in production spending in California, boosting many local economies, especially in the Los Angeles area.
“Not only has it brought in a ton of money for most industries in the economy here, since productions need everything from hotels to rental space to food to on-location shoots that can really go anywhere, California has also erased a lot of the competition,” explained John Whistler, a film production analyst in Los Angeles. “California’s long-term tax credits largely reduced productions in places like Massachusetts and Florida, and annihilated Michigan’s film industry. And right now they are gunning for Georgia, which is the current epicenter for Marvel film making productions, and their old rival Vancouver. California wants movies to be shot there again and for TV shows to come back. They have the infrastructure for it, but productions want to keep costs down. So California is just plain going after everyone now.”
“Georgia in particular is terrified at the prospect of losing their film industry, especially Marvel productions, and this bill can help make that happen. Actors hate the humidity there in particular. California doesn’t have that. Many would actually pay higher taxes than deal with humidity or Georgians believe it or not. The credits may be that final push for California to take a huge chunk out of Georgia.”
Lawmakers in California quickly agreed on Thursday. SB 144 quickly passed the Assembly 62-0, with unanimous, bipartisan support. The Senate followed up with a 37-0 vote.
Film industry leaders immediately praised the decision on Thursday, specifically noting the longer-term benefits of soundstage production credits.
“The continuation of the entertainment industry, one of our core industries, is key to California’s economic success,” said State Building and Construction Trades Council President Robbie Hunter in a statement. “The soundstage construction tax credit, led by Senator Portantino, will allow California to remain competitive with other states that are looking to carve up Hollywood as yet another raid on the California economy.”
Opposition against the bill has been at a minimum, with no legislator speaking out against SB 144.
“California getting a massive return on investment through local economies is huge in getting both parties support,” continued Whistler. “By spending just under $900 million in tax credits in one cycle and increasing spending within the state by $6 billion during that same cycle, it amounts to a money-maker. And all that increased revenue just brings in more tax money and brings in many jobs. Everyone voted for this because it just makes fiscal, political,, and social sense. Only downside is that a few Angelenos might have their street blocked off for filming for a week.”
Governor Newsom is widely expected to sign SB 144 into law soon.
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