California Rally Advocates for Expanded Film Tax Incentives

News Summary

Hundreds rallied in Sun Valley, California, urging support for increased tax incentives in the struggling film and television industry. The event, ‘Stay in L.A.,’ highlighted the need for Governor Gavin Newsom’s proposed budget, which aims to boost production incentives. Advocates emphasized the urgency of maintaining a competitive edge against other states and countries while addressing concerns about inequality in tax breaks affecting local workers and creatives. Lawmakers are pushing for streamlined film permits and enhanced credits to combat production job losses amid a significant decline in the sector.

California witnessed a significant rally on Saturday, as hundreds gathered in Sun Valley to promote expanded tax incentives aimed at revitalizing the state’s declining film and television production industry. The event, titled “Stay in L.A.,” attracted labor leaders, policymakers, and industry workers who voiced their struggles amid a troubling decrease in production jobs. The collective aim was to garner support for Governor Gavin Newsom’s proposed budget, which seeks to increase film and television production incentives from $330 million to $750 million annually.

The proposed legislation includes raising the film and television credit to 35%, while expanding eligibility to encompass a broader range of productions, including animation, large-scale competition shows, and shorter television series. Advocates believe these changes are crucial for keeping California competitive against states like Georgia, which have more lucrative tax incentives, and international locations such as Canada and the U.K.

Concerns were raised about the growing inequality in tax breaks, particularly how they disadvantage working-class and middle-class creatives and crew members who play vital roles in the industry. The “Stay in L.A.” movement, which was born out of recovery efforts following local fire disasters, stressed the need for major studios to remain committed to maintaining set production in the Los Angeles area. However, there has yet to be any public response from these studios.

During the event, industry workers highlighted the importance of various crew roles, including grips, costumers, and drivers, which are often overlooked in broader industry discussions. The ongoing decline in production is underscored by recent reports indicating a 22% drop in on-location film production in the first quarter of 2024, with television production falling by 58% over the past three years.

In response to these challenges, lawmakers in Los Angeles are advocating for measures such as streamlining film permits and enhancing tax credits to aid in retaining production jobs. Current film tax credits in California range from 20% to 25%, and the proposed increases are viewed as essential to reversing the trend of job losses in the entertainment sector.

Critics of tax incentives argue that their overall influence on the state economy is questionable. Nevertheless, supporters contend that expanding the credit could significantly impact the broader economy, including tourism and small businesses that thrive because of the film and television industry.

A notable grassroots effort has emerged, with over 100,000 letters of support sent to state lawmakers advocating for the tax credits. While the proposed legislation has successfully passed some initial hurdles in the California legislature, it faces further scrutiny, particularly from politicians representing areas outside the entertainment-centric regions.

With California’s economic outlook raising concerns, many question the funding priorities of the state and the potential sacrifices that may be necessary to support the film industry. The rally concluded with a strong call to action, encouraging attendees to actively engage with their elected representatives to support the proposed tax credit initiatives, as leaders warned that unchecked declines in production jobs could result in Hollywood facing a future similar to that of Detroit.

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• ABC7: Investigates Tax Credit for Hollywood
• Los Angeles Times: California Production Incentive Program
• Reuters: Voight Seeks Tax Credits for Hollywood
• Variety: Michelle Pfeiffer on LA Tax Incentives
• Hollywood Reporter: California Film Subsidy Bill Changes