Posted 18 May, 2008 in CA News
Governor seeks to retain California productions
By ASSOCIATED PRESS
SACRAMENTO — 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.
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.
A series of Assembly speakers, all from Los Angeles, have pushed unsuccessfully for a California tax credit since 1998. They include Assembly Speaker Fabian Nunez, who steps down as speaker next week and is termed out of office after this year, and his successor, Karen Bass.
“If the governor would propose ways to increase revenue to offset the credit, this would be a blockbuster hit in the Legislature,” Nunez spokesman Steven Maviglio said in a statement. “Unfortunately, the governor has never included funding in any of his budgets for the bill and has undermined the bipartisan support the credit has enjoyed by proposing a cuts-only budget.”
Besides New York, Alaska lawmakers last month voted to give state corporate income tax breaks of 30% or more to offset money spent in the state on movie production. Michigan boosted its credit to 42% of production expenses last month.
Massachusetts enacted credits in 2006 and increased them this year. However, a state Dept. of Revenue report last month found the incentives cost the state $138 million in lost tax revenue.
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