Under the Influence: Money and Power in Politics

Backgrounder: Hollywood's Film Incentives Fight

(Image courtesy of TheWrap.com)The film production industry in Los Angeles took a beating during the recent recession, not helped by the three-month writers' strike that started in late 2007 and cost the industry an estimated $2.1 billion.

As the film industry looks to regain some of that lost footing here in California, we could see an increase in lobbying efforts from the studios. The goal? Persuade state and local agencies to increase subsidies and tax breaks to filmmakers to keep them from straying to states that offer juicier handouts.

Here's a quick peek at the current landscape for film incentives.

SOME INCENTIVES IN OTHER STATES:
New York - Offers a 5 percent refundable tax credit to productions completing 75 percent of their stage work in NYC, as well as a 1 percent marketing incentive to encourage productions to promote a "Made in NY" program.
North Carolina - Offers a 25 percent film incentive; increases per-project cap to $20 million from $7.5 million; defines employee fringe contributions, including health, pension and welfare as qualifying expenses; defines per diems, stipends, and living expenses as qualifying expenses.
Louisiana - Offers 30 percent transferable incentive for total in-state expenditures related to the production of a motion picture. An additional 5 percent labor incentive can be earned on the payroll of Louisiana residents that are employed by a state certified motion picture production. Louisiana has no limit to the amount of incentives that can be earned by a single production.
New Mexico - Offers 25 percent tax rebate on all production expenditures in the state, as well as a loan of up to $15 million for approved projects.
Georgia - Offers 20 percent tax credit on any project over $500,000, and marketing incentives for displaying Georgia's logo.

FILM INDUSTRY FACTS:
- The entire U.S. film production industry is estimated to generate $57 billion for the national economy.
- California is home to 60 percent of the jobs in the post-production industry, but a slow growth rate between 2003 and 2008 indicates that a lot of the lower-end production jobs were going to other states.
- From 1997 to 2008, L.A.'s share of the film and video production industry job market dropped from 40 percent to 37.4 percent, equating to a loss of over 10,000 direct jobs and over 25,000 indirect jobs for the local economy. That's a loss, in monetary terms, of $2.4 billion in wages.
- Since California's tax credit program was introduced by the California Film Commission in July 2009, 113 projects have been approved to receive tax credits, equating to more than $1 billion being spent in the state, and over $500 million generated in wages for below-the-line staff (crew members other than the director, actors, producers and a few other "above-the-line" jobs)

RESOURCES:
REPORT - One in six jobs in Southern California are in the creative industry
REPORT - Impact of film production on L.A. economy
A Rundown on Film Incentives from TheWrap.com

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