FilmLA Seeks ‘Vast Expansion’ of California Tax Credit, Citing Production Decline in 2023

FilmLA, the quasi-public agency that handles film permits in Los Angeles, called on Wednesday for a “vast expansion” of the California production incentive, citing a 20% drop in local filming last year.

California provides $330 million per year to subsidize TV and movie production in the state. But New York nearly doubled its tax incentive to $700 million last year, and other jurisdictions — like Ontario, Georgia and the U.K. — do not cap their subsidies.

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“California sat idle and allowed these jurisdictions to grow,” said Paul Audley, the president of FilmLA, in an interview. “If they don’t start fighting now, more and more of these centers will exist around the world.”

FilmLA issued a report Wednesday showing that Los Angeles remains the world’s largest production hub. But it has lost global market share over the last two years, from 22.6% in 2021 to 18.5% in 2023, according to the agency’s calculations.

L.A. production took a severe hit during the Writers Guild of America and SAG-AFTRA strikes last year, as the industry simultaneously pulled back from the Peak TV era. FilmLA previously released permit data showing that local production rebounded somewhat in early 2024, but then stalled below pre-strike levels.

The latest report is an analysis of film and TV releases in 2023, compiled largely with IMDb data. The agency studied productions made by U.S. companies for U.S. audiences, excluding many smaller films and productions initially intended for foreign audiences.

The report showed that productions from Los Angeles were not alone in seeing a decline in TV releases. Programming shot in Georgia and the U.K. dropped 35% and 33%, respectively, in scripted TV shows on the air last year. New York increased marginally, from 52 to 56 shows, while Ontario climbed from 17 to 22 shows.

On the film side, productions made in the U.K. and New York saw increases in theatrical releases in 2023, while Los Angeles saw a slight decline.

The strike shut down nearly all scripted TV production in Los Angeles for six months. In the third quarter of 2023, according to earlier FilmLA data, scripted TV was down 99% from the same quarter in 2022.

The films released last year were shot well before the strike began, but some film releases were delayed into 2024 because actors were unavailable to promote them.

In the interview, Audley said that L.A.’s overall market share has been declining steadily since 2016.

“We really don’t see so far in 2024 any reason to think things are getting better,” he said. “They may be a little worse than 2023.”

FilmLA is a non-profit public benefit corporation, which issues permits for location shoots on behalf of local governments throughout the L.A. region. It does not engage in lobbying, but its board is made up of representatives from the entertainment industry, labor unions, and other community and business organizations.

California temporarily increased its film incentive by $180 million over two years in 2021, when state coffers were overflowing with a pandemic-era surplus. The state also offered a separate $150 million incentive to promote construction of soundstages, of which $36 million has been allocated so far to NBCUniversal for the expansion of the Universal lot.

But in the last two years, the state has been forced to temporarily raise business taxes and cut spending to close large deficits. In June, the state delayed an expansion of the program that helps families pay for child care due to its cost.

“We’re aware the state budget isn’t in the healthiest of places,” Audley said. “But if you don’t support key industries, your budget is only going to get worse.”

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