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Lawmakers to offer new plan for TV and film production tax breaks

October 04, 2013|By Melanie Mason
  • Dylan O'Brien rehearses in December 2012 a scene from the MTV series "Teen Wolf," which relocated from Georgia to Los Angeles to take advantage of a California tax credit. Two L.A. legislators will propose a new film and TV incentive package when the Legislature reconvenes in January.
Dylan O'Brien rehearses in December 2012 a scene from the MTV series… (Kirk McKoy / Los Angeles…)

SACRAMENTO --Two Los Angeles legislators announced this week they'll be pushing a new plan for tax breaks for film and TV production when the Legislature comes back to work in January. 

California has had incentives for the entertainment industry since 2009, in an effort to fend off other states trying to lure film and TV shoots with generous tax breaks.

Gov. Jerry Brown signed the latest round of tax credits last year, which authorize $100 million in credits annually until July 1, 2017.

Assemblyman Mike Gatto (D-Los Angeles) said in an interview that his plan with state Sen. Kevin De León (D-Los Angeles) would be more than an extension of the current plan.

"I view this as a rather new product with different ideas," said Gatto, who serves on the California Film Commission, which allocates the tax credits.

Those new proposals include a tiering system that would give the maximum credit to productions that pay wages to California residents and incentives to build sound stages and post-production facilities.

Gatto said there would also be a credit for shoots that take place in under-utilized areas of the state, a provision that could address "the perception problem with the [current] credit that it’s purely for Southern California."

“Given the vulnerable state of our economy we can’t afford to hemorrhage any more good-paying jobs,” said De León in a statement. “First thing in 2014, we need to extend the film tax credit and improve it to maximize job retention and bolster this home-grown industry."

And the price tag for the proposal? That's still to be determined, Gatto said.

Concerns about the subsidies' costs have come up in the past. The entertainment industry last year originally sought a five-year extension of the credits, but ended up with two additional years.

And there's been much back-and-forth as to whether the credits have delivered the economic benefit the credits have delivered. Studies by UCLA and the Los Angeles County Economic Development Corp. said the incentives have provided an economic boost; the state's Legislative Analyst's Office said the program caused a net loss in state revenues.

"If this was just an expansion -- a very inelegant, blunt direct expansion of the current credit -- I’d probably have a problem with that myself," Gatto said.

"The only reason why I feel comfortable doing this now is I believe it's possible to craft it in a way that really does maximize benefit to the community as a whole," he said.


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