STUDY: California’s Film Industry Can Not Compete with Georgia

Project Casting

A new study suggests California filming incentives are not enough to compete with other states and countries.

According to a new report by the Los Angeles Times, California taxpayers pay out $330 million each year in financial incentives intended to persuade producers to film in the state. But even after millions in incentives, California is struggling to keep up with the competition.

The Milken Institute issued a new report on Thursday that Georgia and New York continue to out-compete with California for its tax dollars when it comes to attracting major Hollywood productions. Also, United Kingdom’s lucrative filming incentives are beating California’s film industry.

The report suggests California boost or even exceed New York’s $420 million filming incentives to keep up. It also recommends the state spend more money to attract larger-budget productions and indie films.

That said, California’s tax program has attracted long-running TV series, which has helped boost TV production in the state. But, movie production has not increased. Besides Paramount Pictures’ Bumblebee and Disney’s Captain Marvel, which Project Casting shared casting calls for, there have been very few movies filming in the state.

Politicians tripled the annual film and TV tax credits to $330 million from $100 million two years ago. The current program is set to expire in 202, though there are significant initiatives currently in place to extend the film school program.

Filmmakers can recoup as much as $25% of their spending up to their first $100 million on crew salaries and other qualified costs, such as building sets. Studios can then use such credits to offset tax liabilities they have in California.

The tax credits only apply to below-the-line filmmaking costs such as equipment and crew. They do not include the salaries of principal actors and directors. However, the Milken study recommends reducing the number of credits available to ongoing television shows to ensure funds are available for new television productions.

“The intent of such a recommendation would be to incentivize the show to find the cost of remaining local to be better than any effort at relocating, while also making additional funds available to attract and retain newer shows,” the report said.

California falls behind Georgia in attracting major Hollywood movies.

“Georgia production continues to grow and poses a significant overall threat to not only television but especially larger budget movies,” the report said.

Recently, Georgia has attracted major productions including several Marvel movies such as Black Panther, Avengers Infinity War. TV shows are filming in Georgia including The Walking Dead and Netflix’s Stranger Things, all of which Project Casting shared online.

It is important to note that there is international pressure. Britain has drawn major Hollywood movies including, all of the recent Star Wars movies. Ultimately, the Milken study recommends that California lowers the minimum amount feature films need to spend to qualify for tax credits.

As the LA Times reported, California requires that a movie spends at least 75% of its budget in-state, or that at least 75% of principal photography occurs in-state.

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