Filming in California
California Film Commission Releases Comprehensive Study on Tax Benefits/Revenues Generated by Film & Television Production
FOR IMMEDIATE RELEASE
08/22/2005
Contact: Amy Lemisch, Director
Contact Phone: 323-860-2960
Study Reveals Significant Economic Benefits Entertainment Industry has on California Economy
HOLLYWOOD, CA -- The California Film Commission released today the results of a comprehensive study, conducted over the last six months by the Los Angeles Economic Development Corporation (LAEDC), detailing the way in which the state's tax funds directly benefit from feature film, television and commercial production. Funded by a coalition of leading entertainment industry groups concerned about the future of California film production, this study marks a continuing effort to show the significant economic impact the entertainment industry has on California's economy and the ever-increasing and devastating amount of revenue the state loses to runaway production.
Employing actual budgets from recent California-based productions, the LAEDC conservatively estimated the economic output per production as it relates to jobs, wages and state sales and income taxes.
"With this new research we can specifically identify the tax dollars the state loses each time a production leaves to take advantage of aggressive incentives offered by other states and countries," said Amy Lemisch, Director of the California Film Commission. "It is crucial that we remain competitive - keeping production in California means more jobs, more money for small businesses, more tax revenues, and more tourism."
Following is a detailed example from the LAEDC study which illustrates the way in which California directly benefits from production and the loss the state suffers when a production goes to another state or country:
A feature film with a $70 million budget and a 75 day shooting schedule in California, created temporary jobs for 588 cast and crew, in addition to 1,182 extras. These numbers are equivalent to 141 full-time one-year jobs. This particular project also sustained the equivalent of 425 full-time indirect jobs. The study found that the total overall economic output, defined as "the increase in gross receipts resulting directly and indirectly by economic activity associated with production spending," generated by this production was $199 million, resulting in at least $10.6 million in state tax revenues for California. (Approximately $2.8 million in sales tax and $7.8 million in income tax.)
Movies of the Week (MOW) are another key segment of production that California should be eager to attract back. Over the last 10 years the majority of these productions have left the state due to the attractive incentives offered by Canada and other parts of the country and world. The study looked at a typical MOW shot in Los Angeles with a $4 million budget and found that direct and indirect workers earned a combined $8.9 million in wages. The overall economic output generated by this type of production was $12.6 million, generating at least $630,000 in state tax revenues for California. (Approximately $170,000 in sales tax and $460,000 in income tax.)
"If we could regain even a fraction of the MOW business that has fled to Canada - say 20 productions per year - California would reap $12.6 million in tax revenue," said Steve Dayan, business agent for Teamsters Local 399. "We need to find ways to increase jobs so that we can keep our infrastructure strong."
"In analyzing individual productions and the tax revenues they generate, LAEDC researchers have confirmed the bottom-line impact of each lost production," said Chris Essel, Chair of the California Film Commission. "In today's competitive climate with other countries and states wooing productions with a variety of generous incentive packages, we need to proactively work to keep California as a filmmaker's first choice."
The coalition of entertainment industry groups who funded the LAEDC study includes the Directors Guild of America (DGA), the International Alliance of Theatrical and Stage Employees and all its locals, Teamsters Local 399, the Screen Actors Guild (SAG), the Producers Guild, the Independent Film and Television Alliance (IFTA), the Association of Independent Commercial Producers, the Motion Picture Association of America (MPAA) and the Academy of Television Arts and Sciences (ATAS).