Gov. Gavin Newsom’s proposal to double the California production incentive to $750 million may sound like a lifeline to an industry in need, but to those of us in who have seen up-close the jobs bleed to other states and countries for over two decades, it falls somewhere between “too little, too late” and “better late than never.”
As 35-year industry veterans, we share the Governor’s call for action that is “big and bold.” But the devil is in the details. It’s never as simple as expanding the pot of available money.
Since the program’s inception in 2009, legislators have been reluctant to match the incentives of states like Illinois, New Mexico, Louisiana and Georgia, as well as overseas jurisdictions like the U.K. and Ireland, all of whom have benefited at California’s expense.
Hollywood once recreated the world on its backlots and soundstages, from medieval Europe to African jungles and Middle Eastern deserts. Today, even Los Angeles can’t pass for Los Angeles. The 2011 alien invasion film “Battle: Los Angeles” was shot in Baton Rouge and Shreveport. To recreate 1930s L.A. in his 2006 film “Ask the Dust,” the late Robert Towne journeyed to South Africa. The 2022 Liam Neeson film “Marlowe” recreated its vision of 1930s L.A. in Barcelona and on Irish soundstages.
In preparing our forthcoming biopic “Buzz,” based on the life of famed Hollywood dance director and filmmaker Busby Berkeley, we have been repeatedly urged to discount the film’s cost by shooting in Atlanta or London. From our vantage, celebrating Hollywood’s Golden Era in the 1930s and 1940s by contributing to its demise in 2025 would be an indigestible hypocrisy – but others have no such qualms.
Need to implement something unmatchable
To save its remaining jobs and lure back those it has lost, California must implement an incentive others cannot and will not match.
First, an open-ended incentive has been a political heavy lift in Sacramento for years, but its time has come. Few other states have the ability to absorb a no-cap incentive, and no state has so much to lose by not implementing one. Studies confirm the resulting economic activity more than offsets the loss of tax revenue. For California’s incentive to be broadly impactful, it must accept all applicants.
Likewise, California would benefit from lifting the limits on qualifying expenditures, which are currently capped at $10 million for independent films and $100 million for non-independent films. Such distinctions are increasingly arbitrary and arcane. An overall no-cap incentive would allow all productions to be treated equally, with no limits on qualifying spend so long as they are filming in-state and employing California cast and crew.
Third, lawmakers should revisit “above-the-line” salaries. While legislators have been rightly skeptical of subsidizing A-lister salaries and studio executive bonuses, it makes less sense to exclude wages for actors working at the union-negotiated scale rate or singers, dancers, and stuntmen. A $750,000 per person cap would be more than sufficient to be competitive with most other states.
Help filmmakers raise money
Current rules also require 60% of financing verifiably in place at the time of application with a monetizable tax credit certificate furnished later in the process. The incentive should help producers raise money – not reward them after the fact. A no-cap incentive combined with a front-end monetizable tax credit certificate based solely on the production staying in California would do just that.
Finally, we must more aggressively incentivize the return of out-of-state series. Series constitute an especially devastating and recurring loss of jobs every year they continue to shoot out-of-state. A per-year incentive of 30-35% to lure back series which have shot for two or more seasons outside California would prove broadly irresistible.
Many will scream this constitutes a giveaway to an already-wealthy industry, but the lion’s share of suffering from runaway production (compounded by the pandemic, strikes and fires) has fallen disproportionately on the working class and union labor, many of whom haven’t worked in nearly two years. California has prior experience with the harm that befalls its overall economy when it loses a major regional industry.
The entertainment industry helped build California when it moved here a century ago. Allowing it to die would irreversibly harm the prosperity and image of the entire state. California owes Hollywood. It’s time to honor that debt.
Lake/Major principals Kristi Lake and Wade Major are native Angelenos and producers of the forthcoming Busby Berkeley biopic “Buzz.”
