Two Los Angeles City councilmen want to see the fees for location shoots waived for next year's TV pilot production season.

The proposal -- which took its first step with the passage of a fiscal impact request by a council committee Wednesday -- couldn't come at better time for the TV industry, which has seen a number of productions forsake Southern California for other cities.

But could any loss in revenue come at a worse time for the recession-wracked city, which has seen layoffs and cutbacks in schools, libraries and services?

The bigger question is whether the loss of those funds would be offset by the financial benefit of increasing the number of pilots shot here.

Also read: Report: L.A. Still Losing Drama Pilots to Other Cities [4]

That's the quandary council members will face when they take up the issue, probably in August. Before it does, the City Administrator must return with an estimate of how much in fees the city stands to lose. Last year the fees, which pay for the permitting process and the assignment of city staff to projects, amounted to $360,000.

"If Los Angeles wants to remain the world's entertainment capital, we can't sit by while other cities out-hustle us to attract television production," Councilman Eric Garcetti (pictured), a mayoral candidate who introduced the motion along with Councilman Paul Krekorian, told TheWrap Thursday.

"An L.A. Economic Development Corporation study showed that a single one-hour drama generates hundreds of jobs and more than $3 million annually in state income and sales taxes. I want to keep those dollars here," Garcetti said.

FilmL.A. Inc., the non-profit agency which handles permits for film and TV location shoots, recently reported its numbers for this year's pilot season, and it wasn't pretty. Just 51 percent of all pilots were shot in L.A., compared to roughly 80 percent in recent years.

And dramas -- which are more expensive to produce, employ more people and shoot on location more than comedies -- were down to 21 percent. 

New York and Los Angeles tied with 11 broadcast network drama pilots each this past production cycle after having 10 each the previous cycle. Canada had 10 such pilots this time out, and other locations had 11. In cable pilots, Los Angeles led with 11.

At the start of 2012-13 fall viewing season, 18 of the dramas on TV will be L.A.-based, including new and returning shows. Twenty-three dramas will be filmed outside the area. That means that for the first time in FilmL.A.'s study, less than 50 percent of dramas on the air will be shot in L.A., according to the group.