Bribery allegations involving California’s TV and film tax credits must not be allowed to derail the program, the author of a bill to extend it said Tuesday.
Assemblyman Raul Bocengra, whose AB3 measure is pending in the state legislature, called the investigation “the elephant in the room” in terms of getting his bill passed, in a speech at the Hollywood Chamber of Commerce’s State of the Industry Conference in Hollywood.
State Senator Ron Calderon, who sponsored the previous bill extending the program, is the target of an ongoing FBI sting operation in which he’s accused of accepting $60,000 in bribes to makes changes in the measure, designed to keep TV and film productions from leaving the state.
“The allegations from this investigation are profoundly disturbing, and if true should be punished to the fullest extent of the law,” Bocengra said. “Our system must not tolerate anyone who would betray the trust the public has placed in them.”
But he said the situation need to be put in perspective.
“The FBI could have picked any topic from any industry to mount a sting,” Bocengra said. “I want to be clear, the integrity of the program itself was never questioned. This is the most transparent tax incentive program that California has and this will not in deter us in any way next year.”
AB 3 was the first bill sponsored by the freshman senator, who said he’d detail the bill’s expansion of the program early next year. It’s currently capped at $100 million annually, well below what other states and countries are offering.
“The fact the FBI found the tax credit to be a convenient ruse has nothing to do with the merits of the film tax credit,” he said. “It has nothing to do with the costumers, craft services and cost accountants who all benefit from film production in California.”
Bocengra said that the fallout from the allegations could be overcome politically, in part because more than half of the members of the Assembly weren’t in office when the sting took place last year.
“So in the real world, this shouldn’t impact the effort to make the California film tax credit what it should be,” he said. “But this is Hollywood. And you know better than anyone else how perception can trump reality.
“That’s why we are going to need you to help remind the public how important this tax credit is to the entertainment industry.”
Bocengra said that since the incentive program launched in 2009, the state has allocated tax credits to nearly 275 film and TV projects. By the time these projects have completed post production, they will have spent $4.75 billion in California, including $1.5 billion in wages paid to tens of thousands of “below-the-line” crew members.
“Look, I got my masters at UCLA in urban planning, not finance, but I think $4.75 billion is a pretty good return on investment,” he said.