California hopes incentives entice TV, film producers

By Gary Gentile
Associated Press

LOS ANGELES — Gov. Gray Davis unveiled a wage-based state tax credit last week that could save film producers $50 million to $100 million annually while enticing them to shoot movies and TV shows in California.

The plan drew praise from entertainment industry leaders.

Actor William Baldwin called it "a welcome development."

"Runaway production will only be eased with concerted efforts on both the state and federal levels," said Baldwin, president of The Creative Coalition, a political and social action group.

The governor's proposal mirrors a national plan being considered by Congress that would offer a 25 percent tax credit.

Davis wants to grant producers a 15 percent tax credit on the first $25,000 earned by workers on lower-budget productions if nearly all of the filming takes place within the state.

The California credit would offset state taxes applying to the companies that make the films. Legislation will be required to implement the plan, which Davis hopes to start in 2004.

"We're creating an atmosphere that lets filmmakers know that California really wants their business," Davis said.

Union and industry leaders are concerned about films and TV shows being made outside the country — most notably in Canada, which offers incentives that can reach 35 percent of labor expenses.

Those credits have cost the United States 25,000 jobs and as much as $10 billion annually for each of the past three years, according to entertainment industry executives and labor officials.

Union leaders have been lobbying for states and the federal government to match those subsides

"Gov. Davis' proposal is an important advancement in SAG's efforts to bring attention to the problem," said Melissa Gilbert, president of the Screen Actors Guild.

A 1999 study commissioned by SAG and the Directors Guild of America found that $2.8 billion worth of direct expenditures on U.S. film and television production was lost in 1998.