Hollywood Incentives Bill Passes the CA State Assembly Without $750 Million Specified, For Now
A bill set to dramatically expand California's incentives for film and television production companies to shoot in-state has passed the California State Assembly, albeit without a mention of the $750 million program cap promised by Gov. Gavin Newsom.
Legislators voted 73 to one on Tuesday to pass AB 1138 and send it to the Senate, with Assemblymember Carl DeMaio of San Diego representing the sole 'no' vote. The vote comes after the state Senate passed a similar bill focused on the state's entertainment tax credit program earlier in the day, with the governor's promised cash infusion absent from the amended legislation.
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The move adds momentum to union- and studio-backed attempts to provide a shot in the arm to filming in California even as the state faces significant budget deficit concerns. Newsom has pledged support to one of California's signature industries even while existing or proposed state services are likely to be cut or pulled back as a result of the budget situation.
That's necessary, argued the bill's advocates on Tuesday. 'California's iconic film and television industry is in crisis,' said bill co-author Assemblymember Rick Zbur, who represents an area in L.A. stretching from Hollywood to Santa Monica, before the vote. 'The hardworking men and women and the small businesses that have built an industry that is intrinsic to California's identity are experiencing depression-level-eras of unemployment and loss of business as our iconic business is being lured away to other states and other countries with better credit programs.'
Other champions of the bill, like Assemblymember Tom Lackey, Assemblymember Mike Gibson and Assemblymember Sharon Quirk-Silva, emphasized that the proposed legislation was a jobs bill, not a handout to Hollywood.
'What's happened is we got a little arrogant on this film situation and we thought we're all that and a bag of chips, and you know what, the other states decided they would compete with us,' said Lackey, who represents the High Desert. 'And not only that they would compete with us, but they would take this industry.'
He said the legislation wouldn't save Hollywood, but it was an important step to make California more competitive with regard to incentives programs in other states and countries.
But the bill's one critic in Tuesday's session, DeMaio, disagreed, framing the proposed legislation as an ineffective solution that essentially sought to reward influential political allies in Hollywood. 'We should make California prosperous for all and it's not by giving out the gifts of tax credits to those that have influence, those that might make the best case to the politicians in Sacramento but rather policies that will flatten the cost curve,' he said.
DeMaio singled out California's heavily unionized Hollywood workforce and regulations as the reasons why productions fled the state, not the tax credit. 'Nothing in this bill deals with labor costs, nothing deals with the regulatory burden,' he said. DeMaio added that the bill is only attempting to 'soften the blow of some of those bad policies.'
The amended bill removes mention of Newsom's pledge to increase the film and television incentives cap from $330 million to $750 million annually, as did its companion bill in the state Senate. Advocates say that figure doesn't need to be in the bills as long as Newsom's budget is passed.
The $750 million figure survived in Newsom's revised budget, unveiled in May, even as providing Medi-Cal benefits to undocumented immigrants and Medi-Cal coverage for weight-loss drugs like Ozempic did not.
The amended bill also expands the tax credit's program for training workers from historically underrepresented communities to work in the film and television business by opening up the program to additional nonprofits.
In a sign that none of this is a done deal and the situation remains fluid, industry unions and the grassroots group Stay in L.A. have encouraged their members to continue writing to and calling their state representatives to support the bills. 'This is one of the many steps we have ahead of us, a coalition of entertainment unions told members after the Assembly and Senate bills passed on Tuesday.
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