A record 380 applications were filed Monday by movie and TV productions seeking a share of the $100 million annual allocation of tax incentives provided by the state of California, which marks an 18 percent increase over submissions in June 2012.
This is the fifth year of the program. A total of 322 applications were filed last year, while 176 were filed in 2011. The initial screening granted incentives to 28 productions last year.
There were also 28 productions accepted this year on the first day.
Those who are not awarded a share of the tax incentives through a lottery system may be eligible to go on a waiting list. In past years, projects on that list have ended up getting funding. For instance, from the 2012-13 grants, a total of 70 of those who applied either got funding or dropped out (because they went elsewhere or never got made).
California Film Commission executive director Amy Lemisch says some of those who do not get funding simply will never reach any screen.
“A lot of them either won’t get made at all because they needed the tax credit to complete their financing package, or they will leave the state,” Lemisch says. “So it’s either that they don’t get made, or they’re leaving. And we ask them to let us know where [if they leave] so we can track what’s happening with these projects.”
One example last year was the movie The Call, starring Halle Berry, which started on the waiting list but ended up being given incentives. Other movies that have been funded in recent years include Argo, Lovelace, Dark Skies, Baggage Claim, The Boy Next Door and 10 Things I Hate About You.
TV series that have gotten tax credits include Body of Proof, Major Crimes, Justified, Bunheads, Pretty Little Liars Switched at Birth, Teen Wolf and Rizzoli & Isles.
The productions eligible for a 20 percent tax credit are feature films with a minimum budget of $1 million and a maximum (that is covered) of $75 million; movies-of-the-week or miniseries with a minimum $500,000 budget; and new cable TV series with a minimum $1 million budget.
Network series are not eligible unless they are coming to California after shooting in another locale outside California. When they come to California (or back), they are eligible for a 25 percent tax credit.
Also eligible for a 25 percent tax credit are independent films, with production budgets between $1 million and $10 million. They must be produced by a company that is not publicly traded or by a company that is no more than 25 percent owned by a publicly traded company. A minimum of $10 million is set aside for independent films each year
In 2012, after a long legislative battle, California extended the tax incentive program through 2017 with the same $100 million annual allocation (though money can be shifted from year to year in some cases). Backers wanted a five-year extension but in the end had to settle for a two-year extension. Gov. Jerry Brown signed that bill into law in late September.
Among the backers was a coalition of unions and guilds who estimated that those given incentives for 2012 would spend $683 million in the state and employ 5,700 people. That coalition included SAG-AFTRA, the DGA, IATSE, the California Teamster Public Affairs Council, Teamsters Local 399, IATSE, Laborers’ International Union of North America Local 724, Professional Musicians Local 47 and the Recording Musicians Association.
Steven Dayan of the Teamsters says the incentives have become more and more important to the industry. “When I started as a location manager, we would go because the look was in a particular place," he says. "If we could find the look here, we would use it; if we couldn’t, we would go elsewhere. That’s no longer the case. Today, it is: Where is the best incentive?”
Adds Dayan: “What’s happening here is that the really good paying jobs are leaving. We have exported a lot of the high-paying jobs, and they have been supplanted by a lot of [lower-paying] reality television shows.”
Benjamin Lindsay contributed to this report.
- Budget, Tax & Economy