We've Got Hollywood Covered

California’s Tax Credits Produce 12 Percent Growth in Film and TV Work for Second Straight Year

Below-the-line crew members continue to pick up work as result of 2015 program

California’s Film & Television Tax Credit Program 2.0 (Program 2.0), enacted two years ago to stem the tide of runaway production, continues to be a success, resulting in a double-digit increase in hours worked by below-the-line crew for the second straight year, according to a report released Monday by the California Film Commission.

As a result of the program, below-the-line crew members worked 12 percent more hours during the 12 months that ended this June than in the prior year. A similar growth rate was reported during the first partial year of the program, 2015, as well as during the first full year, ended last June. Worker data comes from employees covered under the Motion Picture Industry Pension & Health Plans.

Gov. Jerry Brown signed the legislation in 2014 that led to the five-year Program 2.0, which built on and replaced an earlier, expired tax credit regime. Under the program, relocating TV series and independent films can receive up to a 25 percent credit on qualified spending, while feature films, miniseries, new TV shows and pilots can get as much as 20 percent. The program uses a “jobs ratio” — rather than the lottery system used in the first program — to determine which products receive credits.

Since enacting Program 2.0, California has brought in or kept 100 film and TV projects contributing approximately $3.7 billion in direct spending, including $1.4 billion in below-the-line wages. Last year alone, the program allowed California to attract 12 series from out-of-state to start filming locally, which are on track to generate a combined $891 million in direct spending, including $315 million in wages for below-the-line crew.

The program was responsible for notable moves including NBC series “Timeless” relocating to the state for a $9.9 million tax credit, HBO’s “Veep” moving from Maryland to California for a $20.3 million tax credit, and FX’s “American Horror Story” traveling from Louisiana for a $25.8 million credit.

And the program is also paying dividends beyond the Thirty-Mile Zone surrounding Hollywood — tax credit projects are on pace to contribute $28 million in spending across 10 California counties excluding Los Angeles. Paramount and Netflix’s “13 Reasons Why” shelled out nearly $22 million in four Northern California counties.

“The encouraging short-term results we reported in last year’s annual report have evolved into sustained and very encouraging long-term results for Program 2.0,” California Film Commission Executive Director Amy Lemisch said in a statement accompanying the study. “The expanded tax credit program is working as intended and having a real impact.”