Los Angeles Mayor Eric Garcetti has requested an expansion of entertainment tax credits from the state and appointed a new chief advisor on film and TV production. Entertainment lawyer Ken Ziffren, who takes up the advisor position following the death of Tom Sherak, will seek to increase local production through expanded state incentives.
“Stopping runaway production is about protecting our middle class,” said Garcetti. “Ken will be a powerful leader in our fight against other states that are taking our jobs, and he will be aggressive about streamlining government so red tape doesn’t contribute to driving production away.”
According to the Mayor’s Office of Motion Picture and Television Production, which Garcetti established last year following his election, only one out of 45 “big budget” feature films was shot exclusively in California over 2012-2013, representing a loss of thousands of jobs to other states. From 2005 to 2013, California’s share of the 1-hour TV series market declined from 64% to 28%.
“This is a critical moment for our industry and our economy,” Ziffren said. “If we don’t fight back now, these jobs are going to be lost for good, and that would be a devastating blow to our middle class. This is about jobs for carpenters, electricians, makeup artists — good jobs that leave enough over at the end of the month to save for retirement, save for the kids’ college, and to spend in our neighborhoods.” Ziffren brings extensive entertainment industry experience to the new position, having played a key role in resolving a Writer’s Guild strike and represented the NFL in negotiating network TV contracts.
Bloomberg Businessweek also reports that Garcetti has lobbied Governor Jerry Brown and state legislators to double the current tax credit’s $100 million cap and expand it to include commercials, pay-TV programs and movies with budgets over $75 million.
A consortium of pro-entertainment business groups in Los Angeles have banded together to offer recommendations to cities across Southern California, which would make it easier to film location days in the area. A revised Model Film Ordinance and Best Practices (MFO/BP) was adopted by the California Film Commission in May, laying out a standardized set of policies for filming in the state. Now the consortium – which includes the state film commission along with the Los Angeles County Economic Development Corporation (LAEDC), FilmL.A. and the Southern California Association of Governments (SCAG) hope to have the policies adopted by local cities as well.
The MFO/BP policies call for relaxing several key permitting rules, some of which have been championed vigorously by local residents in response to filming issues in their neighborhoods. The recommended provisions from the MFO/BP include:
- Eliminating the city’s business license requirement for film productions.
- Adjusting the film permit structure to a weekly rate of $650 for the first week and $500 thereafter.
- Reducing the advanced notice requirements from two weeks to five days.
- Requiring law enforcement on an as-needed basis only.
- Reducing the radius required to notify businesses and residents of filming from 500’ to 300’.
- Reducing the radius required to survey businesses and residents of filming for extended hours from 500’ to 300’.
SCAG’s regional council voted unanimously earlier this month to encourage its 191 member cities and six counties to adopt some version of the MFO/BPs.
“Southern California is home to ‘Hollywood’ – it is our heritage, but cannot be taken for granted,” said Glen Becerra, SCAG President and City of Simi Valley Council Member. “By including the MFO/BP in Phase II of our Economic Recovery & Job Creation Strategy, we are clearly stating that supporting the entertainment industry is critical to our region’s economy and future. In addition, this is only the beginning of government, business and an industry specialist working together to adopt business-friendly principles that secure a prosperous California.”
In making their case for change, the consortium points to some 176,700 jobs and $30 billion in spending the entertainment industry is estimated to bring to the region. A 2005 report commissioned by the CFC reported that 10 “feature films” (budgets greater than $70 million) that leave the state means a loss of $106 million in state revenues… in addition to high value jobs and less quantifiable losses to ancillary small businesses such as hotels, restaurants and dry cleaners. The group is concerned that if it is easier to film in other, tax-incentive-rich states, it will give filmmakers that much more reason to go.
“One of the constant refrains I hear from filmmakers is the need for predictability and uniformity in the film permit process,” FilmL.A. President Paul Audley said. “SCAG’s adoption of the Model Film Ordinance will help urge local communities and county governments to work within a framework of policies that can create a region that is attractive to the Industry.”
Finally, an application that navigates the tricky waters of film incentive tax credits in North America, and spits out the best solution for any given project. With the release of its online platform in August, CreditScout joined a handful of other programs designed to search and compare tax credits, including our own free online database Showbiz Incentives, which allows you to compare up to 12 regions at once.
But for filmmakers who already have a budget and are looking to take their tax credit search a step further, CreditScout is a robust, fee-based platform that allows the user to enter all the particulars of a shoot – budget, equipment, crew, how many will be local, etc. – and then determines the top tax credit fits while eliminating those that don’t apply. For example, as the software developers point out in this helpful article on tax credits for microbudget films, many states require a minimum production budget for projects to qualify for their tax credit programs. CreditScout will rule those out, and show you a list of the ones that got nixed.
For a comprehensive look at your film tax credit options, you can even export your budget right out of Showbiz Budgeting and import it directly into CreditScout. Find out how!