When tourists visit Los Angeles, they often flock to have their photo taken with the iconic Hollywood sign in the Hollywood Hills, visit Hollywood’s Walk of Fame and hope to run into a genuine movie star as they sightsee in the City of Angels.
The little known secret these days is that the Hollywood sign looks down upon a landscape that is no longer dominated by film and television production facilities and on-location shooting. You may have just as much luck running into a movie star in Toronto as you would in Los Feliz. Technological advancements—combined with aggressive government programs designed to lure away production and post-production jobs away from our state—mean that filming now happens all over the United States and the world, costing California millions in jobs and tax revenue.
–Louisiana recently announced that production spending in their state topped $1 billion in 2011, a nearly 25,000 percent increase since the introduction of their first incentive in 2003.
–In 2011, Georgia used tax credits to attract $689.3 million in production dollars, which generated more than $2 billion in overall economic activity.
–North Carolina’s tax credit program has attracted more than 35 productions. These projects will spend more than $300 million and create 15,000 jobs.
And while other states are benefitting from this new economic activity and job growth, the Golden State is suffering. According to a just-released study by Burbank–based Entertainment Partners, the industry’s largest payroll service company, California lost $3 billion in wages from 2004 to 2011 because of out-sourced film and TV production. This equates to the loss of 90,000 jobs and a decline of 10 percent in the state’s overall production wages.
The Los Angeles Times recently reported that California effectively has lost the core of its television production. Only two of the 23 new one-hour dramas debuting on network television this fall and mid-season will be shot in the state. Just seven years ago, fully four out of five shows were filmed in California. This is a significant loss considering that network dramas typically have a budget of $60 million and generate 840 direct and indirect jobs for just one season of filming.
As the president of a college graduating young professionals in all the arts, I see firsthand the ways in which gainful employment in film and television make it possible for creative types to remain in Los Angeles to work in our theaters and recording studios; and for artists, designers, and crafts people and technicians of all sorts to bring vitality to L.A.’s internationally recognized commercial and not-for-profit gallery and performance arena. This promotes economic growth and quality of life benefits for all Angelenos.
What can be done? The good news is that California is home to some of the world’s top production facilities, creative talent, skilled technicians and industry experts. The talent in California is unmatched anywhere in the world. And we’re training the next generation of directors, producers, artists, writers, designers and technicians at world-class programs at CalArts, UCLA, USC, Otis College of Art and Design and other universities in our state. But to regain our leadership role in this industry, we must fight back, using tax policy and other tools to make California the smart choice for film and TV production.
In 2009, the state created the California Film and Television Tax Credit Program which has helped attract nearly $4 billion in direct in-state production, created 40,000 jobs and generated $1.3 billion in wages. The program is a profitable investment for California’s taxpayers: for every tax dollar invested in a film and television production, state and local governments are seeing at least a $1.13 returned.
But the Tax Credit program is due to sunset at the end of this year. Gov. Jerry Brown, who signed a one-year extension in 2011, is considering legislation to continue the program for another 24 months. The Film Tax Credit program stands out as an excellent defense against runaway production as productions only benefit from the program after they have invested in California-based production and jobs. Industry leaders, economic experts and Los Angeles elected officials are urging the governor to sign the bill and continue this effective program that created jobs and has given taxpayers a healthy return on investment.
Otherwise, tourists may soon be photographing nine letters on a mountainside that are more symbolic of a tombstone than a calling card.
Ed’s Note: Steven D. Lavine is the president of the California Institute of the Arts (CalArts), which offers undergraduate and graduate programs in visual, performing and literary arts, and a Member of the Los Angeles Coalition for the Economy & Jobs.