I’ve been in Los Angeles just a short while, yet it seems many filmmakers are leaving -- hundreds of them, in fact. Permanently. Was it something I said?
Or is it something the California government isn’t doing?
As the California Film Commission works on next year’s round of film tax credits for its now-full applicant list, I began wondering why I keep hearing stories about production companies relocating to Louisiana, movies shooting in New Mexico and states such as Illinois, Michigan, New York, Georgia and Massachusetts offering much better incentives than the alleged home of entertainment, California.
Even though I’m new in town, I’m aware that so-called “runaway productions” – those productions that leave the L.A. Zone to film elsewhere – have been doing so for many years.
And they’re still leaving even after a bill was signed by Gov. Arnold Schwarzenegger in 2009 that brought in a set of incentives to help blast a hole in California’s deficit. The state now offers filmmakers a 20 percent tax credit if their budgets are between $1 million and $75 million and if they’re producing a miniseries or TV movie.
The incentives also assist TV series that shot all their previous seasons outside California, and independent films not financed by publicly traded companies are eligible for a 25% tax break, the latter only as long as their budgets are between $1 million and $10 million. Wages paid to above-the-line employees such as writers, directors, musicians, producers and performers are not eligible in the writeoff scheme.
Yep, it’s bloody complicated.
Find out more at the California Film Commission, the organization administering the tax program -- which, by the way, is not as competitive as New Mexico or Michigan because California’s rebate is capped at $100 million every year, whereas New Mexico and Michigan don’t have caps. Hello California? Hello? This could be one of the reasons so many are leaving you!
And, as well as this, the California bill does not include commercial productions in its incentives. The Association of Independent Commercials Producers doesn’t agree with this. It estimates ad companies spent $2.16 billion on U.S. production costs in 2008, 54% of which was injected into California’s struggling economy. Surely this tax-credit exclusion is a mistake?
Rick Fishbein, who has 25 years in the film industry and is managing director of Green Dot Films in Santa Monica, thinks so.
“I was disappointed commercial filmmakers were left out of the tax incentive,” Fishbein told me recently. “Ad makers already feel like the orphaned child of the film business, yet we do the same production job as big studios. I employ crew members all year round, doing my best to keep the work in L.A. The lawmakers who passed these incentives clearly didn’t want to help small business owners, and that’s what the majority of ad production companies are.”
Fishbein’s company made 65 commercials last year for brands such as McDonalds, Burger King and internet fantasy role-play game World of Warcraft.
