Who Can Save Hollywood?
California has fought to stop runaway film and television production for more than four years now with a tax incentive program, but some say it’s not enough. The uphill battle to save California’s $17 billion-a-year industry.
LOS ANGELES — California has long been the destination for aspiring actors, but these days, you’re likely to find entertainment industry hopefuls choosing Atlanta over Hollywood.
“I’ve met people who went to USC for film, and they’re all coming here,” actor Josh Waters, who moved to Atlanta last year, told BuzzFeed. “It seems like the same people who took the first train to L.A. are setting up shop in Wilmington (North Carolina) and places around here.”
Waters grew up in Georgia but moved to California and began acting professionally in 2001. He booked roles as the “sidekick neighbor” on sitcoms, including playing “keg bro” in an episode of The O.C. in 2003, but as the years went on, the husband and father of two found it harder to find roles.
“Why don’t we move to Georgia?” the 35-year-old remembered asking his wife. “There’s so much going on there.”
They moved in June.
California has been hemorrhaging film and television production for more than a decade now, but state leaders are hoping to stem their losses and woo production back with an expanded tax incentive program.
The migration of production began in the late ’90s when Canada began offering incentives to lure studios away. By the early ’00s, states like Louisiana began experimenting with their own. Today, there are only six states that don’t.
California finally began offering incentives in 2009. “We must do everything in our power to stimulate the economy and put Californians back to work,” said Gov. Arnold Schwarzenegger, who signed the legislation, at the time. Beverly Hills Chihuahua 2 and Naked Gun 4 were among the first projects to benefit.
“We were sort of later than most states,” said Amy Lemisch, executive director of the California Film Commission. “If we want California to be considered a shooting location, we have to have incentives.”
California currently offers $100 million in tax incentives annually. It’s one of the largest sums offered by a state, but it still lags behind at least other four states, including New York, which has a $420 million annual cap, and Louisiana, which spent $218.4 million in 2012. Massachusetts and Georgia have also outspent California.
According to data of 41 states’ annual caps of the most recent annual incentives obtained by BuzzFeed, California’s $100 million hovers around 4% of the national total, a drop in the bucket. (Representatives from Florida and Kentucky’s film offices did not respond to inquiries from BuzzFeed. A representative from Illinois film office said annual incentive data was not immediately available.)
More than 250 film and television projects have benefitted from the program, but only one of the 41 big-budget feature films released in the past two years was shot exclusively in California:Star Trek Into Darkness. And among this year’s Academy Award nominees for Best Picture, only Her was shot in the state.
“Right now we’re getting our lunch handed to us by these other states,” Assemblyman Raul Bocanegra, a Pacoima, Calif., Democrat who co-sponsored legislation expanding incentives, said in a statement. “We simply can’t sit by and watch this $17 billion a year sector of our economy continue to leave California.”
The Expanded Film and Television Job Creation Act, introduced Tuesday, would offer a 25% credit for television shows relocating to California in the first year, expand the number of television shows that can apply for tax credits, and extend the state’s tax incentive program for five years.
The legislation has the support of at least 59 additional lawmakers who had a hand in authoring it and Los Angeles Mayor Eric Garcetti, who called it a “prudent investment in the future of California’s middle class,” but proponents know there will be resistance to setting aside more money for Hollywood.
“In Sacramento, nothing is easy,” said Assemblyman Mike Gatto, another co-sponsor. “There’s a lot of people who are not necessarily on board yet.”
Gov. Jerry Brown called film production tax incentives “a bit of an arms race” at a January press conference on his proposed budget. “We have to be careful,” he said. “The desires are endless.” Mayor Garcetti called the governor “skeptical” of any increase when he waived city fees for television pilots in October.
There’s no estimate yet on how much lawmakers will try to increase California’s annual cap. Gatto said they’re waiting until May when the governor’s office releases an updated budget proposal. But even if the cap is raised, it might not be enough to compete.
“We’re not going to beat New York. We’re not going to beat Louisiana,” former Los Angeles “film czar” Tom Sherak told BuzzFeed in November before his death in January. “Their incentives are through the roof.”
In his role as Mayor Garcetti’s chief advisor on film and television production, Sherak, the former Academy of Motion Picture Arts and Sciences president, spearheaded the city’s lobbying efforts in Sacramento. He said California’s $100 million cap “wasn’t enough,” but that state leaders would need convincing to increase it.
“I’m sure they’ve heard it before,” he said. “I know when you go up there, they’re dealing with a lot of bouncing balls. They have to be careful on how they distribute that money.”
Sherak was optimistic, but said ultimately, nothing the state could do could bring production back completely.
“We can’t keep it all here,” he said. “That’s impossible.”
Still, Assemblyman Gatto said he sees saving Hollywood as crucial to California’s economic health, comparing the possible loss of the entertainment industry to the loss of the aerospace industry in the ’80s.
“In my district, which includes Burbank, I remember as a kid driving around and it would feel like one out of every five houses were for sale,” he said. Then, about 20% of Burbank residents worked in aerospace. Today, about 20% work in entertainment.
“It’s amazing how much the city was able to shake off the aerospace industry,” he said. “I don’t know if there’s going to be a third thing.”
A major challenge for proponents of film production tax incentives is the perception that the incentives will only benefit Southern California, movie stars, and executives. The proposed bill aims to counteract at least the geographic qualms some might have over incentives, by offering a 5% increase in the tax credit for filming that occurs outside the Los Angeles area. A spokesman for Assemblywoman Beth Gaines, a Republican serving Sacramento suburbs like Rosevile, Rocklin, and Folsom who was one of five who voted against the 2012 incentive extension, said she plans on voting in favor this time around.
“People equate these incentives to, ‘Why should we help these rich people?’” said Clyde Kusatsu, president of SAG-AFTRA Los Angeles, the film and television labor union. “It’s not about them. It’s about the jobs that are created. Dry cleaners, restaurants, busboys, valet drivers.”
Big-name movie stars will get paid no matter where the filming takes place, incentive proponents argue. Those who don’t are the California-based working-class actors and below-the-line crew, which includes set designers, costume designers, hairstylists, makeup artists, camera operators, and sound engineers.
“It feels like no one’s fighting for the little guy,” said actress Lindsay Hollister. “I know that everybody was excited when Gov. Brown was elected because everyone thought he was going to bring production back. During the election, everyone was like, ‘Yes! Please keep tax breaks in California!’”
Hollister said as jobs for Los Angeles-based actors have gotten harder to come by, some are willing to fly to cities like Atlanta just to audition for roles, crashing on friends’ couches to save money.
“I know a lot of actors who are willing to fly themselves just to work,” she said. “Staying here, you’re not getting those juicy roles. Everybody’s hurting. Everybody will take whatever they can get right now.”
But states like Georgia are betting entertainment industry professionals will dump California and move where the jobs are.
“L.A. isn’t very happy with what’s been happening,” said Catherine Dyer, who co-founded Drama, Inc., which provides training to actors in Atlanta and who will play the wife of Schwarzenegger’s character in the upcoming film Sabotage. “We have actors and crew who are moving to Atlanta… It’s been quite a boon to this state. It’s not just the entertainment industry. It’s not just actors. It’s hairstylists, it’s set decorators.”
Waters, the actor who moved to Atlanta in June, said he’s happy with his decision and said the city’s actors are buzzing that it is the place to be.
“Everywhere you go, you see production trucks,” he said.