Originally posted at CA Economy.
By Ed Coghlan.

When you think of the entertainment industry, you might think it’s a Hollywood and Los Angeles thing.

You’d be wrong. It’s a California industry – a $17 billion sector of the state’s economy.

In fact, there are 60 local film commissioners in practically every county in the state who are working to get more production in their respective communities.

Why? It is good for the local economy.

“Outside of production centers like Los Angeles, San Francisco and San Diego, it’s estimated that every day a production is on location they spend $50, 000 in the local community,” said Amy Lemisch, Executive Director of the California Film Commission.

Competition for movie and TV production is keen. California has been losing jobs to other states and countries for nearly 20 years now. Canada, particularly Vancouver, began poaching this work as early as 1997. The trend has been accelerating and has earned the nickname of runaway production.

The Milken Institute is following this issue and has just issued a report on what the Golden State needs to maintain and increase these jobs.

“Keeping filmed production jobs in California should matter to the state as a whole not only because the industry creates sustainable middle class jobs for the crew and supporting staff of each movie or TV show, but also because the impact of the industry is not just limited to Los Angeles,” said Kevin Klowden,   one of the authors of the Milken report.

Legislators representing every corner of California seem to be getting on board.

Fifty Assemblymembers and 9 State Senators have co-authored a bill (AB 1839), which would expand and improve the California Film and Television Retention and Promotion Act. More on what the bill proposed in a moment.

Let’s get back to the competition.

“It’s not any one place that’s attracting these productions. It’s everywhere,” said Lemisch, but she noted that New York, Georgia, Illinois, Louisiana, New Mexico and North Carolina have been particularly effective in attracting production—building up infrastructure like sound stages and, of course, providing tax credits.

“Producers we’ve talked to tell us the first thing they look at are the financial incentives a state if offering,” said Lemisch. Then they look at location, crew availability, weather and other factors.

California began its own tax incentive program in 2009—it’s called the California Film and TV Tax Credit Program, which Lemisch said in an interview today, has been “a success.”

“270 projects have benefited which has meant $4.75 billion to the California economy,” she said, noting that $1.5 billion of that number is actual wages in workers’ pockets.

And it’s those workers, the carpenters, the electricians, the grips, the makeup people, the camera assistants—real middle class jobs– that don’t travel when productions are attracted to other locations. Those workers are hired locally.

So the result is a loss of jobs to California.

This trend has been troubling for some time, reaching what the Milken Report called a “critical stage” now. Proponents of the legislation believe it would expand the state’s ability to compete with other states and countries. 43 states have some type of production tax credit.

The press release announcing the legislation had some troubling statistics:

  • Only two of the 41 big budget films released in the last two years have been filmed exclusively in California.
  • Over the last decade, California’s share on one-hour TV shows dropped nearly 36 percent, costing the state nearly 10,000 jobs.

The legislation proposes extending the state’s program another five years. The legislation also includes:

  • Lifting the budget cap on feature films eligible to apply for the program.
  • Allow all new one-hour television series, regardless of whether they are on network, cable or even Netflix, be eligible to apply for the program.
  • Offering a 25 percent credit for television shows relocating to California in the first year.

Milken’s Kevin Klowden pointed out today that the state’s strong entertainment infrastructure and groundbreaking technology sector technology still matter, but that the state must be more aggressive.

“Not only do visual effects and animation have a strong presence in the Bay Area, but a revised incentive that encourages statewide filming will help to bring back jobs throughout the state that have disappeared since productions first started leaving back in 1997,” he said.

“The global competition for this work will remain,” said Lemisch.”

How California responds will be a topic in Sacramento this year.