CAL GOVERNMENT GROUP SLAMS STATE’S FILM TAX INCENTIVES

A report by California’s nonpartisan Legislative Analyst’s Office questions the findings of the Los Angeles Economic Development Corp. and UCLA that supported the state’s tax incentive program. Far from resulting in growing revenue for the state as those findings concluded, the tax incentive program, it said, actually brings in “well under $1.00 for every tax dollar. … The credit program, therefore, appears to result in a net decline in state revenues.” It also questions whether runaway production is as serious an issue as some in the industry make it out to be, pointing out that the number of production days appears to ebb and flow annually. The study seems to concede that some supposed beneficial aspects of the tax program simply cannot be measured — for example, the number of tourists who are drawn to the state to see the location sites of some movies. Nor, it further notes, can some of the negative effects be adequately measured. How many independent producers have been forced to delay or curtail film shoots because they have been “crowded out” by production companies that hog available film crews, staff, and other industry infrastructure? “We suspect that in some years the crowding-out effect would be close to zero, while in other years, it could be much more substantial,” the report said. It comes at a time when legislators are currently considering whether to approve another $500 million in tax credits for the movie and TV industries over the next five years.