California is under the gun to compete with huge
stakes. According to a Los Angeles Economic Development Corp. report -
What Is the Cost of Run-Away Production? - motion picture production
sustains employment for 245,000 people with earnings of $17.2 billion
in California. A big-budget feature film generates $70 million in
production spending, nearly $200 million in economic output, 1,300
movie industry jobs, and state taxes in excess of $10 million.
Despite
backing by Governor Arnold Schwarzenegger, Hollywood labor unions, and
key Democrats, Assembly Bill 777 - designed to attract production back
to California with a 12 percent refundable credit against income or
sales tax - met with stiff opposition. As a result, action was tabled
until 2006.
According to the Entertainment Industry Development
Corp., the number of feature film on-location days in Los Angeles
dropped from nearly 14,000 in 1996 to slightly more than 8,700 in 2004.
On October 20, 2005, Los Angeles Mayor Antonio Villaraigosa announced,
"We cannot stand idly by while other states enact incentives to lure
jobs away from California."
Even less populous states are taking
action. The Wyoming Film Office is helping craft a bill with up to 15
percent rebate for qualified film production expenditures in Wyoming.
"We
are exploring several incentive programs that would work within our tax
structure, constitution, and labor force expertise while offering
production companies competitive savings," says Michelle Howard,
manager of the Wyoming Business Council Film, Arts & Entertainment
Office. "The recent loss of two films with Wyoming storylines to
production in Canada prompted this initiative."
To be sure, the
incentives game will continue to evolve as localities, states, and
countries seek to persuade production companies to yell, "Lights,
camera, action" at their locations.
