Runaway Prod. Is it the incentives or...

[David Allen Grove]

California Unfriendly to Business

 

The responsibility for runaway film production rests primarily with a California Legislature and Governor(Davis) that have been hostile to California?s businesses in the last three years. Increases in the cost of doing business in California are directly attributable to a stark increase in regulatory demands. ?Business leaders already rank the business environment in California far below other states in such critical areas as energy costs, housing, employee costs, regulation, infrastructure and taxes,? said Allan Zaremberg, president, California Chamber of Commerce. Without first taming an anti-business political majority, no amount of tariff or tax credit will begin to encourage businesses, including film producers, to stay or return to California.

 

The Real Issue: An Unfair Business Climate

 

 

In 2000, the average yearly wage earned in the film industry was $71,000, and the workforce was growing at 6.6% per year. The film industry is part of the California landscape and culture. It is a shame to see film production go elsewhere. But at what cost should California taxpayers subsidize a bloated industry?

 

 

Vive le Tax Credit!

 

 

A wage-based tax credit for California-produced films may mitigate some of the benefit Canada?s subsidies currently offer. However, it may not be enough. Production companies typically have little or no tax liability against which to apply the credit. As such, a tax credit would be little more than a token response to the hardship imposed on California?s businesses the last three years.