Decision To Slice Film Rebates Questioned
By DARRELL SATZMAN
California’s bid to encourage filming in the state has spread about $7 million a year among hundreds of productions,barely chump change for the major studios.
Yet, producers, entertainment trade groups and labor unions say Sacramento may be shooting itself in the foot by eliminating the short-lived Film California First program.
“It has a lot to do with perceptions and the sense that the state is trying to keep productions here,” said Steve Dayan, business agent for Teamsters Local 399, which represents truck drivers, location managers and animal trainers. “The fact that California doesn’t offer incentives is a mistake.”
Film California First was established in 2001 by the California Film Commission to help stem a worsening runaway production problem spurred by generous tax and labor incentives offered by other states and countries such as Canada and New Zealand.
But the program fell victim to the $38 billion state deficit. Meanwhile, the Film Commission has seen its budget slashed by more than 55%, to $1.2 million, in fiscal year 2003-2004, from $2.9 million a year ago.
The recent indictment of Cody Cluff, former head of Los Angeles-based Entertainment Industry Development Corp., on embezzlement charges further throws into doubt the future of another organization charged with promoting local production.
The Entertainment Industry Development organization in recent months has been under fire by neighborhood groups that object to the presence of film crews.
For advocates of government assistance, there appears to be little help on the horizon.
Various members of the California Congressional delegation have, for years, tried to obtain labor-based tax credits and other incentives for productions that film entirely in the United States, but so far their efforts have been fruitless.
One reason is image: Lawmakers from other states bristle at what they see as rebates that would pad the wallets of well-heeled producers and actors. The most recent legislation, introduced by Reps. Howard Berman (D-North Hollywood) and David Dreier (R-San Dimas), is languishing in the House Ways and Means Committee.
In its 30-month existence, Film California First reimbursed $22 million to 3,500 productions, according to Karen Constine, director of the California Film Commission. Although originally slated to receive $15 million a year for reimbursements, its allowance was ultimately cut by the Legislature in each year.
In addition to sales and hotel tax incentives, Film California First offered reimbursements for labor performed by state employees, such as park rangers and Highway Patrol officers when filming on state property.
Constine acknowledged that the financial benefits of Film California First were not on par with those offered in other areas, but she said they were “a tipping factor” that, combined with other considerations, kept many productions local.
Besides television shows like “Six Feet Under,” “Alias” and “CSI: Crime Scene Investigation,” recent feature films to make use of the program include “Charlie’s Angels: Full Throttle,” “Matchstick Men” and the upcoming “Kill Bill Volume I.”
Michael Walbrecht, vice president of studio and production affairs for Warner Bros., said the main factors that go into deciding where to shoot a film include cost, the script and the influence of the top talent.
“Those three tend to drive a lot of it,” Walbrecht said. “Sometimes directors or actors want to work in a specific area, and that’s where we work.”
While acknowledging the need for deep cuts in the state budget, Walbrecht said government has a role to play in helping keep film work.
“We thought it was a valuable program,” Walbrecht said. “We found that it was more effective for lower budget feature films or television, but even the big budget features felt they could benefit from the program.”
According to Film Commission data, 50% of the reimbursements went to feature films, 25% to television productions and 19% to commercials and photo shoots. The remainder was divided among music videos, documentaries and other miscellaneous categories.
The most a single production could be reimbursed was $300,000, a total only a handful of films reached.
Among the industries helped most by Film California First was local commercial production, which has been in a slump for three years as many advertisers have sought out cheaper locales to film their spots.
“It was maybe not a deciding factor, but it played a part; it added value to the decision to stay local,” said Steve Caplan, senior vice president of the Association of Independent Commercial Producers. “Over the last couple of years there was a lot of awareness of this program. And every little bit helps when you talk about retaining production and attracting production to the state.”
Satzman is a staff reporter at the Los Angeles Business Journal.
