Is Los Angeles in a state of “emergency” when it comes to runaway production? According to new Los Angeles mayor Eric Garcetti, it sure is. One of his top priorities in his administration is to appoint a film czar at City Hall by the fall to tackle the problem.
For the entertainment industry, this is great news. However, he has to entice state politicians to hop aboard his plan to battle the attractive tax incentives in other states like North Carolina, Louisiana and even New York.
At a press conference at Sunset Gower Studios earlier this year, Garcetti addressed the issue head-on along with several production crew representatives.
Chris Baugh, location manager for Argo, talked about problems Los Angeles is fighting.
He said, “I am starting to see people who have never made a feature film in Los Angeles. In fact, they are afraid to. They are concerned that it is too expensive and too difficult.”
This fact is important to the TV and film studios since production costs have skyrocketed over the last decade. The out-of-state tax incentives can save the studios tens of millions of dollars on just one movie. These incentives are also keeping the independent film industry thriving.
The modest tax breaks that California has on the books is not enough. The California Film Commission even released a report saying that the state “continues to experience a pronounced erosion of this signature industry.” What many fail to realize is that without a booming entertainment industry, many of the support industries for production have been forced to close.
The biggest thing standing in Garcetti’s way is Sacramento because the state pols have a different agenda.
In an interview with Variety, the mayor shared, “Tomorrow we are not going to wake up with an unlimited cap on credits. But we have to show forward progress, and I am going to be like a dog with a bone on this and stay with this. I can’t single-handedly move Sacramento, but I think we will do what works to educate our lawmakers…that this is a huge shot in the arm for our economy to land a lot of this back.”
California offers a maximum $100 million in tax incentives per year. If you compare that number to New York’s $420 million program, anyone can see why California is losing out on the production game.
It’s now up to the 42-year-old mayor to convince Governor Jerry Brown that this is a worthwhile program.
“We had a great conversation. He doesn’t suffer fools lightly, and you better bring your data, but I did,” the city politician said. “I showed him the impact, the multiplier effect, the benefit to the state treasury. Some studies have shown, at worst, some small debit to the state treasury, which is then multiplied many times over in economic activity. And I underscored the importance that this is a signature industry.”
The opponents to this push for more tax incentives are worried abut further budgets cuts in other sectors like education.
Bonnie Reiss, former advisor to Governor Arnold Schwarzenegger, revealed that runaway production “still has to compete with other budget priorities, and until there’s more revenue, it’s going to be a very difficult challenge to get that done in the state legislature.”
Sadly, most major films are now shot in other states like Iron Man 3 in North Carolina and The Long Ranger in New Mexico and Utah.
Garcetti knows that a lot of the damage cannot be undone at this point. California may have to court the smaller productions.
He revealed, “We have to be smart about what we chase. Maybe it is not the $200 million movie. Maybe it is the premium cable and the commercials. Maybe it is the videogaming as well as the smaller commercials.”
No matter what, the mayor is ready to go head-to-head with lawmakers because it is a top priority not only for the local economy, but for the state as a whole. He also knows it won’t be an easy fight.
“We are going to fight a lot of fights,” said Garcetti. “I know we are not going to win every single one of them. But if we don’t put a lot of strength toward winning a couple of battles in this war, we are just going to continue to be left behind on the battlefield.”
