Canada, Georgia Benefit Most From California Runaway Productions
(hollywoodreporter.com)
Roughly half of the projects that applied for but didn’t receive tax credits to shoot in California from 2015 to 2020 chose to film elsewhere, costing the state $7.7 billion in economic activity, 28,000 jobs and over $350 million in state and local taxes.
According to a new study commissioned by the Motion Picture Association, a trade body for the major studios, runaway productions generated over $3 billion in spending in areas the projects went to. The most popular destinations were Canada, Georgia, and New Mexico.
“If these productions had stayed in the state, California would have reaped the economic benefits,” reads the report conducted by the Los Angeles County Economic Development Corporation (LAEDC).
The findings are meant to boost support for film and TV tax credits given out by California. Under the program, the state provides productions $330 million annually by allowing filmmakers to get back 20 to 25 percent of their spending on qualified expenditures, such as paying crew and constructions costs. It does not include salaries for actors, licensing fees and distribution expenses.
In July, Gov. Gavin Newsom signed a bill (SB144) adding another $330 million in tax credits to the program, which is set to expire in 2025, to incentivize shooting in the state amid concerns that California was losing its foothold as the country’s major film hub. Another bill expected to be signed by Newsom will extend the credits through 2030.
“The success of this program is not only the jobs created and retained, but the economic engine it provides to other businesses throughout the region and the state,” said Dee Dee Myers, director of the Office of Business and Economic Development, in a statement. “This LAEDC Report reveals how much that means to California’s economy – and why we’re so committed to this critical industry here in our state.”
The program contributed from 2015 to 2020 $22 billion in economic output and 110,300 jobs, the study estimated. This increase in economic activity returned to state and local governments roughly $962 million in tax revenue.
The study evaluated 169 productions that were given tax breaks. These projects were given $915 million in credits and generated $7.4 billion in direct spending.
The report also followed 157 projects that were denied tax credits to shoot in California. The study’s authors said that about half of the productions that weren’t selected ended up leaving the state altogether for another jurisdiction.
By: Winston Cho
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