Gov. Arnold Schwarzenegger said Friday that California must increase tax incentives to movie and television studios as a way to keep them from moving their productions out of state, the Associated Press rerpots.


He said incentives being offered by other states are luring studio projects away and costing California tens of thousands of jobs.


Tax credit proposals have repeatedly failed to clear the Legislature. Legislative spokesmen expressed support for the idea Friday but worried about the lost taxes when California is struggling with a budget deficit Schwarzenegger said could reach $20 billion next year.


The governor's comments were sparked by ABC Studios' plans to move production of "Ugly Betty" from Los Angeles to New York.


Studio spokeswoman Charissa Gilmore declined comment Friday, saying no final decision had been made. She also declined comment on whether tax incentives would help keep the production in California.


"What happened was (productions that shifted to other states) didn't come back to California; they went to Louisiana, they went to Florida, they went New Mexico because they give great tax incentives," Schwarzenegger said.


New York Gov. David Paterson signed a law last month that triples his state's film tax credit. Companies can receive a 35% credit if at least three-quarters of their production is filmed in the state.

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