The announcement by California Governor Gavin Newsom about an increase in the state's tax credit program for film and TV production marks a significant milestone in the efforts to retain film productions in California. The increase from $325 million to $750 million in allocated tax credits underlines the urgency of keeping the film industry from relocating outside the state. Scott Budnick, a producer known for “The Hangover” and an appointee of Newsom, highlighted the unusual timing of this announcement during a panel at IndieWire’s Future of Filmmaking Summit. Typically, such budgetary announcements are reserved for January, but Newsom's pre-emptive declaration in October demonstrates his understanding of the critical nature of the situation.
In a panel discussion titled “Filming Outside Hollywood: Challenges, Opportunities, and Passports,” Budnick, alongside FilmLA President Paul Audley and Entertainment Partners’ Sarah Westman-Liu, delved into the broader challenges faced by the entertainment community both in Los Angeles and across the U.S. Audley shared alarming research from FilmLA, noting that film production has seen a severe decline, even compared to the industry strikes in the previous year. With productions increasingly being moved to Georgia, Canada, or overseas, it's clear that strategic interventions are necessary. Audley emphasized that the traditional view of the industry being anchored in California merely due to its headquarters is misguided.
Production can and has moved, a fact reinforced by the phrase “Ran-Away production.” This shift underscores the urgency for local efforts to retain these productions. Westman-Liu explained how alternative film markets, like Georgia, have succeeded by bolstering infrastructure and offering competitive incentives, attracting productions away from California. Beyond just incentives, other regions offer tax credits for above-the-line talent and more predictability in their tax incentives, which California currently lacks. European countries, for example, embed these incentives in national tax codes, ensuring consistency against budgetary changes.
Westman-Liu also pointed out the fiscal advantages of filming abroad, such as favorable exchange rates and lower labor costs, as seen with Netflix's productions in Colombia. To counter these trends, Budnick emphasized the need for local workers and representatives to be actively involved in pushing for favorable policies in Sacramento. It's crucial that a diverse group from the film industry, representing different backgrounds and roles, advocate for the importance of these tax credits to California lawmakers. Budnick is committed to organizing these efforts, stressing the importance of grassroots mobilization from January to June, coinciding with the congressional session.
He asserted that without active participation from the workforce and an understanding of the diverse needs of the industry, the proposed $750 million program could face reductions. Budnick’s appeal resonates with the need to showcase the true face of the industry beyond the conventional representation of studio executives. This call to action goes beyond just securing the tax credits; it is about making California a competitive and attractive hub for film production once again. Watch IndieWire’s full “Filming Outside Hollywood” panel to gain more insights into these pressing issues. Special thanks to the partners of our Future of Filmmaking Summit: Canva, Kino, SAGindie, The American Pavilion, United for Business, and The Walt Disney Studios.
