(Reuters) - Three days before the
Oscars, the Los Angeles film czar and a think tank delivered some damning news
to Tinseltown: Hollywood's status as the home of American film and television
production is threatened because places like New York are offering better
financial incentives to studios.The study of employment and
production data released on Thursday by the Milken Institute, an economic think
tank, says California has lost tens of thousands of entertainment jobs to New
York and other U.S. states in the past decade, and film and television
productions with them. While it may.......
be one of the best
years for high-quality film in recent memory, with nine strong films nominated
for the best picture Oscar, just one of the nine was filmed in California.
Ken Ziffren, a veteran California
attorney recently appointed as Hollywood's film czar by the mayor of Los
Angeles, said the report showed Hollywood was in a "bad spiral," both
in terms of jobs and productions leaving California. Ziffren repeated a call for an
expanded California film and tax credit, as did the Milken report - an issue
that is politically controversial.
Proponents say it is vital to
keep middle-class jobs and film production in the state. Opponents say wealthy
Hollywood studios don't need another tax break and question whether further
financial incentives will produce a net gain in jobs and revenue.
The report by the Milken
Institute, headquartered in Santa Monica, California, but with a national and
international perspective, said California lost 16,137 film and TV industry
jobs between 2004 and 2012, based on U.S. Labour Department statistics.
During the same period, the
report said, New York State gained 10,675 entertainment jobs. "California is losing film
and television productions to New York and other states," the report said.
"The data shows that other states are being more effective in using their
incentives to bring in new productions and create jobs." The report said the loss of jobs
was particularly troublesome because it represented the exodus of middle-class
wage earners with high pay, an average of $98,500 per person, and businesses
that thrive on the movie industry such as caterers.
BATTLE OF THE TAX CREDITS
California has a tax-credit
program, but essentially only productions with budgets of $75 million or less
qualify for the rebate of 20 percent to 25 percent. Proponents of legislation under
consideration in California want the incentives to cover big-budget movies, as
well as television pilots and dramas.
New York offers tax credits of
between 30 percent and 35 percent and allocates more money - $420 million
annually - out of its budget to give incentives to film and television
production there, roughly four times what is awarded in California. Other states such as Louisiana,
Texas and New Mexico have also drawn jobs and production from California in
recent years through tax credits.
The Milken report says that
production in California hit its peak in 2004, when 128 films were made there,
while 50 were filmed in New York. In 2012, other states offering incentives
were involved in 142 films, compared with 104 in California. Of the nine movies nominated for
best picture Oscar on Sunday, only "Her," the science fiction
romantic drama starring Joaquin Phoenix and Scarlett Johansson, was made in
California. It had a relatively low budget of $25 million.
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