BURBANK, Calif., September 21, 2007, Robert Goldrich --- The first public hearing of the State Assembly Select Committee on the Preservation of California's Entertainment Industry was held on Monday (9/17) at the IATSE Local 80 office in Burbank. It was a session marked by both hope and skepticism, the former over the committee members' commitment to stem the runaway tide of production through an incentives program--and the skepticism rooted in this being just the latest in a series of seemingly productive meetings with legislators which in the past has failed to yield any relief to the flight of filming from the Golden State.

    Committee chair and Assemblymember Paul Krekorian (D-Burbank) acknowledged the frustration felt in the industry over the lack of tangible incentives to help California at least come close to leveling the playing field with assorted other states and countries that have put tax credits, rebates and the like in motion to lure feature, TV and commercial production.
    "Give us another shot," he told those gathered for the session, offering a hopeful promise that this time around things will be different. He said the key to finally attaining success is getting the right message out to those legislators, particularly in the State Senate, who need convincing.
    Krekorian said he understands the argument that financial incentives for the filming industry shouldn't be a priority when funding for education, health care and other services is hard to come by. But the fact is that the lack of anti-runaway production legislation is forcing good paying, working middle class jobs out of the state. And the tax revenue that would be generated by keeping those jobs in California could go a long way towards helping to bankroll progressive education and social service programs. "How many more services could we provide today if we had taken the proper action [to retain the filming business] a decade ago?" Krekorian asked rhetorically.
    "We'd be creating new money to spend on those needs," concurred committee member and Assemblyman Anthony Portantino (D-Pasadena), who observed that media coverage of filming incentives is skewed, promoting the misnomer that such measures amount to financial backing for big name celebs and entertainment "moguls." Portantino and fellow committee member, Assemblyman Cameron Smyth (R-Santa Clarita), related that the true beneficiaries of filming incentives would be the middle class workers whose livelihoods are in and/or related to this industry.
    Committee member and California Assembly majority leader Karen Bass (D-Los Angeles) noted that Assembly Bill (AB) 1696--which she authored--was a live wire right up until the 11th hour when both houses were finalizing the state budget earlier this month. But ultimately the bill--which would have provided production grants to qualifying features, TV shows and commercials shot in California--was nixed.
    Bass said that she and other legislators will be "back at it in January" to gain passage for AB 1696 and/or Senate Bill 740. Authored by Sen. Ronald Calderon (D-Montebello), SB 740 would institute tax credits for certain projects (budgeted at up to $75 million) lensed in California, including theatrical features, TV programs and spots.

Testimony
    Assemblymember Krekorian noted that this week's public hearing wasn't designed to define solutions but rather to open up a dialogue with the industry, discuss the problems being faced and touch upon policy options for keeping the industry at home. The committee ultimately will come up with its recommendations--including presumably incentives legislation--based in part on input and feedback received over the course of several hearings.

    Among those offering testimony during the Monday session were: Amy Lemisch, executive director of the California Film Commission (CFC); David Phelps, director of external relations for the Association of Independent Commercial Producers (AICP); Cleve Landsberg, chair of the Assistant Directors/Unit Production Managers/Technical Coordinators Council West for the Directors Guild of America (DGA); and labor representatives from the Screen Actors Guild, IATSE Local 44 and Teamsters Local 399.
    Lemisch noted that production incentives in other states such as Louisiana, Illinois, New Mexico and New York have yielded major dividends. Expenditures on filming in Louisiana amounted to some $3.5 million in '02, with a comprehensive package of incentives enacted the following year. In '05, that Louisiana figure of a few million dollars grew exponentially to $246 million.
    The CFC executive director also cited a Los Angeles Economic Development Corp. (LAEDC) report which provided a handle on tax revenues generated by filming. For example a feature film with a budget of $70 million translates into nearly $10.6 million in state taxes. A commercial spending $560,000 would generate $47,000 in state taxes. And keep in mind that these are an underestimate of revenue--state unemployment and disability taxes as well as state taxes on any corporate profits are not included. The productions described also generate substantial tax revenues for city and county governments, including sales tax, business license fees, utilities and parking taxes, permit fees and hotel taxes.

    AICP's Phelps noted that the commercial production industry has an annual impact of some $4.5 billion, and is often referred to by assorted film commissioners as "the bread and butter" of their business. According to LAEDC research, commercial-making generated roughly $83 million last year in California sales and income taxes alone.

    Phelps added that there's a misconception that a big chunk of spot production would be shot in California anyway. The reality in this bottom line-conscious business, he said, is that "every job is up for grabs" when it comes to where to film. This, observed Phelps, has been recognized and acted upon by some 34 states that have enacted production incentive measures, most of which encompass commercials. This includes a three-tiered program in New York specifically targeting spots.

    But beyond incentives, Phelps affirmed that film-friendly policies are also needed. Currently, he said, downtown Los Angeles--which has seen a significant increase in its residential population--is considering regulations that would place restrictions on filming, including the hours during which lensing may take place. If enacted, such regulations could discourage production downtown, which currently plays host to some 30 percent of the filming done in Los Angeles by AICP companies.

    In his testimony, DGA's Landsberg said of incentives, "The first thing companies ask when I am hired to break down, schedule and budget a movie project, is, 'Where can we get the best incentive for our movie?' This naturally refers first to the creative requirements being fulfilled, but the bottom line is always where can we get the most bang for the buck. California has so much to offer, and we, who live here, want to stay at home, but it is becoming more and more difficult to consider California as a primary option."