Aides for legislators behind evolving California anti-runaway production bills have met to compare their proposals, discussing prospects for fashioning a unified plan that would offer financial incentives designed to encourage filming in the state. As earlier reported (SHOOT, 3/5, p. 1), California Assembly members Sheila Kuehl (D-Santa Monica) and Scott Wildman (D-Los Angeles) are in the process of authoring measures to help stem the tide of runaway production to foreign countries, particularly Canada. And a third bill-being championed by Assemblyman Herb Wesson (D-Culver City)-has also entered the mix.
Kuehl’s bill involves a 6% tax credit on the cost of labor and targets productions with budgets under $5 million. The bill’s current language is limited to TV pilots and movies of the week. The latter have left California in mass exodus to Canada. There’s also the possibility that the scope of Kuehl’s proposed legislation will be expanded to include spot production. "We have been talking to commercial producers," related a spokesperson from Kuehl’s legislative office in Sacramento, "and are considering incentives for them as well to stay in California."
In its current form, Wildman’s legislative measure is a more sweeping proposal. It would establish a 10% tax credit for labor costs covered by collective bargaining agreements when a TV or film production is shot entirely in California.
And Wesson’s bill aims to increase production industry employment opportunities for economically disadvantaged Californians, including single parents and low-income workers. It calls for tax credits of up to 30% of wages paid to eligible workers who are trained and hired by producers and studios. This proposal is designed to combat the loss of jobs caused by increased runaway production to foreign countries.
Concern over lost jobs and revenue has triggered legislative interest. Last December (SHOOT, 12/18/98, p. 7), the California Assembly’s Select Committee on The Arts and Entertainment-chaired by Kuehl-held a public hearing to assess the situation. Industry leaders and labor spokespeople testified. Among the organizations represented were the Association of Independent Commercial Producers, the Screen Actors Guild, the Motion Picture Association of America and the International Cinematographers Guild.
At the hearing, it was learned that in the ’98-’99 production season alone, approximately 11,300 acting jobs were lost and that, for each of those, several crew and craft jobs went north. Also affected were rental companies that supply equipment such as cameras and cranes, food vendors, stage rental businesses and assorted other enterprises. It is estimated that between ’96 and ’97, California’s economy lost $1.2 billion due to runaway production. Job losses are being blamed primarily on the labor subsidies and additional financial perks offered by the Canadian government and other competitors. There is an 11% federal subsidy for the use of Canadian labor, to which many provinces add another 11%.
Meanwhile, a couple of separate developments relating to runaway production have surfaced on the American labor front. The DGA and SAG are jointly funding a study to analyze in detail the runaway production issue. The two guilds intend to use this study, which is being conducted by an independent consulting firm, as a tool for developing a range of appropriate solutions to address the problem.
And the DGA has retained a Washington, D.C.-based lobbying firm, Washington Counsel, P.C., to help combat runaway production on a national level. Washington Counsel will work with DGA leadership in developing legislative and other strategies.
"Runaway production is a serious problem that impacts the livelihood of all of our members," stated DGA national executive director Jay D. Roth. "Some foreign governments have instituted subsidies and other programs that make it economically attractive for producers to take their films out of the U.S. We must do everything possible to protect our essential American industry from this dangerous trend …"
Washington Counsel is best known for its expertise on budget and tax issues, including corporate and international tax trade. The firm’s principals have extensive experience in U.S. government; many served in senior positions in the executive and legislative branches while others worked in various administrative agencies within the executive branch.
