There is no "conclusive evidence" that California's film tax credit program will reverse the state's recent decline as a venue for film and TV productions, according to a new report from the nonpartisan Legislative Analyst's Office.
California has offered $100 million in film and TV production tax credits annually since 2009. Supporters want to extend the program beyond its scheduled July 2017 end date, as well as expand it to increase the number of productions eligible to receive the credit.
Without the credit, proponents say, one of the state's trademark industries will increasingly be at risk of losing productions to Louisiana, Nevada and other states. Of 41 feature-length films made in 2012-13, only two were made in California and nine used California as a secondary location. The other films did all of their filming outside California, according to the LAO's report.
But the analyst's office's report warns of the prospect of an increasingly expensive "race to the bottom" if California tries to match generous TV and film benefits offered elsewhere. Even with the benefits, there is no guarantee that California's share of TV and film production jobs — almost 123,000 in 2004 but 107,400 in 2012 — will rebound.
"If the Legislature wishes to continue or expand the film tax credit, we suggest that it do so cautiously," the LAO reported.
The analyst's office said almost all TV and film production jobs are in Los Angeles County. The report also rejects claims that the state tax credit pays for itself. The LAO estimates that the state's rate of return is 65 cents on the dollar.
The tax-credit program was part of the indictment of state Sen. Ron Calderon, D-Montebello. Authorities allege that Calderon allegedly accepted cash and other favors in return for trying to trying to open the tax-credit program to low-budget independent films.
PHOTO: Actor Nicolas Cage testified in 2013 in support of a Nevada bill proposing tax incentives to filmmakers. The Associated Press/Cathleen Allison