California State Assembly Meeting On Film Subsidies

The California State Assembly will be holding a hearing this Friday to discuss film subsidies:

THE EFFECTIVENESS OF THE FILM INDUSTRY TAX CREDITS ON RUNAWAY PRODUCTION
Friday, March 18, 2011
10:00 a.m. to 12:00 noon
Pasadena City Hall, Council Chambers
100 N. Garfield Avenue (2nd floor)
Pasadena, CA 91109

Audio of the meeting should be available here.

The state of California offers film subsidies for smaller productions. Those of us in the California VFX industry have been severely effected by film subsidies for large productions in the UK, Canada, New Zealand, and Singapore. By having the government partially pay for the VFX on feature film work done in these countries, it has distorted the actual price of VFX by making it more expensive to do the work in California. This is why so many projects have gone to other facilities in other countries.

If you have read my blog you know that I am strongly against film subsidies and I have contacted assembly members to let them know this.

Even if the state of California could offer film subsidies for large scale production, they would have to compete with countries like Canada which offer to pay almost 35 cents for every dollar spent by US studios there. So this can be extremely costly for the state.

A smarter and more cost effective solution would be to support what I have been an advocate of:

Approaching the federal government to file a petition with the World Trade Organization.

The international organization was created in 1995 to encourage free trade with most countries in the world signing to the join. One of those agreements to join was the elimination and prohibition of trade distorting tariffs and subsidies. US trade lawyers strongly argue that the film subsidies offered in other countries to lure US studio productions violate that agreement and the WTO have mechanisms to remedy the situation.

Below is the contact information of assemblymembers conducting the meeting:

Portantino, Anthony J.
Dem
44th
Room 2003
Butler, Betsy
Dem
53rd
Room 3132
Campos, Nora
Dem
23rd
Room 2175
Gatto, Mike
Dem
43rd
Room 4140
Gorell, Jeff
Rep
37th
Room 4208
Lara, Ricardo
Dem
50th
Room 2179
Ma, Fiona
Dem
12th
Room 3173
Mitchell, Holly J.
Dem
47th
Room 2176
Smyth, Cameron
Rep
38th
Room 4098
Swanson, Sandré R.
Dem
16th
Room 6012

Soldier On.

32 Responses to California State Assembly Meeting On Film Subsidies

  1. cloudboy says:

    After promoting globalization for more than fifty years to support american corporate imperialism (south america etc) you are now asking the WTO to reverse their pro-globalisation stance because it doesn’t suit american workers? Good luck.
    http://old.disinfo.com/archive/pages/dossier/id216/pg1/

    • VFX Soldier says:

      You’re actually mistaken, the WTO from the very beginning promotes global trade by eliminating protective mechanisms such as tariffs and subsidies.

      Again, if you read my blog, you’ll know that I have consistently stood against subsidies here in the US and abroad.

      Regardless how you feel, you do agree that subsidies are prohibited by the WTO no?

    • cloudboy says:

      LOL. American farmers are some of the most subsidized workers in the world. Not to mention the effects WTO supported patent law has had on their competitors in developing countries
      http://www.thefutureoffood.com
      http://www.theendofpoverty.com
      Anyway, back to more important things like hollywood. You’ve talked extensively of leverage, subsidies are just one of the more visible examples of the insidious economic pressures that countries and corporations can use – don’t forget, a hollywood studio recently forced a first world government to change it’s labor laws for the worse. China is a member of the WTO, it doesn’t even have labor laws or basic human rights. Coincidence? China’s Dear Leader believes the only way workers will improve their conditions is to work their way out of poverty. I know you live in LA and just want to keep driving your Hummer but I fail to see how you can maintain the situation for workers in the LA without improving labor laws in developing countries. Now the shoe is on the other foot and america is feeling the effects of a system it originally promoted to it’s advantage
      http://en.wikipedia.org/wiki/Banana_republic
      My point here is that the laws of the WTO have been weighted in america’s favor for a long time, so what the WTO thinks is prohibited is irrelevant considering the true nature of the american brokered free market
      http://en.wikipedia.org/wiki/World_Trade_Organization
      Most of the world is still dominated by the economic advantages the USA negotiated when they ‘won the war’ over 50 years ago, but many who’ve witnessed the effects of this tilted playing field believe the system doesn’t work
      http://en.wikipedia.org/wiki/Joseph_Stiglitz
      I wouldn’t be the first to suggest that there’s a connection between a creative worker’s conditions and their inability to comprehend basic economic principles and shifting industry developments
      http://www.nytimes.com/2005/06/27/business/media/27movie.html
      Remember when hollywood promoted the american system of ‘greed is good’? The western post war generation has been riding that wave all the way to retirement. Sperlberg, Lucas, PJ and the rest have made their money. Who cares about the next generation? YBG/IBG. Money is power and once you have some you can start tilting playing fields too.

      • VFX Soldier says:

        Ok. Going to give you one more chance to answer the question:

        Do agree that subsidies are prohibited by the WTO?

      • cloudboy says:

        Thanks for the last chance, as I’ve said the rules of the WTO are grossly unfair. For every case of illegal subsidies there’s examples of implied economic disadvantage that are even more effective. That’s the way the WTO works. Anyway, good luck on your quest for saving Californian artists. After I’ve finished consulting on this outsourcing deal with non-unioned companies in India and Singapore I’ll get back to my semi-retirement and writing my book on the history of VFX

      • vfxPeon says:

        exactly. you can’t respond with an honest answer to anything. you just continue on your crazy ass rants. now, according to you, the wto doesn’t matter because it’s unfair!

        then you link to some random ass youtube or wiki page that doesn’t even support your point. you are a troll. again, sorry you couldn’t get a green card.

      • VFXproletariat says:

        Pause your DVD player and read again, I answered the question and I said the WTO matters a great deal.
        I just find it ironic that an american is calling for the WTO to stop globalization when the WTO has promoted globalization for america’s benefit for over a generation (using unethical methods).
        It’s not surprising, hollywood’s role is to distract the shallow and american’s have a reputation for having little understanding or interest in foreign policy, as long as they get to drive their Hummers and watch Oprah. They got a wake up call in 2001, and we know how their public servants manipulate the world thanks to wikileaks but the party continues
        http://en.wikipedia.org/wiki/Black_Friday_(shopping)#Violence
        Just so you know I’ve been offered work in the states before but I’ve turned it down. I hate the taste of bile.
        http://www.theonion.com/articles/consumers-say-recession-changed-way-they-blow-payc,19691/

      • vfxPeon says:

        ok, so when the wto does what you want, it’s fair. and when it doesn’t do what you want, it’s unfair?

        you claim you’ve turned down work in the states, because you hate the taste of bile? gimme a fucking break. where’d you get offered a job, the slaughterhouse?

        every time you post, all you do is reveal yourself more and more as an anti-american bigot. that’s all you are. you don’t have any insight to bring to the table. all you do is slam america and then link to some random website.

        come back when you have something valuable to add to the discussion (sans random link.)

      • vfxPeon says:

        also, you’ve never really elaborated what these “unethical methods” are.

        maybe you can find a link to a dilbert strip that has nothing to do with anything and that will explain it for me!

      • VFXproletariat says:

        LOL. Slaughter house – yes, that is a good description! But, you are right, my personal disgust at the way american companies operate and american culture in general is not ‘valuable’ to this american blog. I’ve tried to point out the obvious future for american workers but when you’re in the midst of it it’s hard to see the wood for the trees. If you’re interested in the way the the WTO and the world bank co-operate to destroy any opposition to american corporate monopolization just google it – but why bother? It will make no difference to you in the end – ignorance is bliss.

      • vfxPeon says:

        “But, you are right, my personal disgust at the way american companies operate and american culture in general is not ‘valuable’ to this american blog”

        translation: “The only reason I post here is to be a troll.”

        “just google it”

        translation: “despite all my bitching, i can’t actually justify my dumb ass rants with relevant facts.”

      • cloudboy says:

        Actually, you’ve mis-translated;
        a) It’s pointless discussing the injustices of american imperialism with an audience who have (until recently) benefited from it but are now struggling to come to terms with it’s decline
        http://instruct.westvalley.edu/lafave/chomsky_free_market.html
        b) Criticism of the WTO has been going on for decades, but again it’s useless presenting the other side of the debate to an audience that benefits from the WTO system. I was merely suggesting that you take a peak above the fog of hollywood to inform yourself of more than one side of the issues involved. Incidentally, it’s ironic that ‘The Internet’ was initially funded by the american military, but now corporations are racing to build walls around the freedom of information that it help bring about – get it while you can
        http://www.wired.com/magazine/2010/08/ff_webrip/all/1

      • vfxPeon says:

        a.) you think americans are too biased to understand your belief in american-led inqualities, yet the article you reference to explain your theory was written by an american, who works at an american university, and the link you used points to a site hosted by an american college….in CALIFORNIA…the center of your hatred. ironic.

        b.) to you, anyone who doesn’t hate america is “ignorant.” i don’t see you having any thoughtful debates on anything. you just say things like “google it”, never talk in specifics, and then add inane links.

        again, sorry you couldn’t get a green card. at least you have the internet so you can browse all the AMERICAN websites you love linking to so much!

      • VFXproletariat says:

        LOL. I never said that there wasn’t voices of reason in your midst, but it’s obvious from this blog that they aren’t being listen to.
        I think you’ve been sucked in by your own propaganda if you think that america is the center of the western world and everyone is desperate for a green card. Dream on- america just attracts shallow foreigners that sell out.

      • VFXPeon says:

        hahaha. obviously america is the center of YOUR world. its all you talk about. and you clearly consume tons of our output because you are always linking to it in your posts.

        i also like how you expect americans to just deal with it when it comes to jobs going overseas, but you consider foreigners who travel here to be “sellouts.” you know who screams “sellout”? someone with nothing to sell. you talk shit all day about america, where’s the great cultural output coming from your neck of the woods?

        again, maybe you will be able to get a green card one day and not have to be a bitter crybaby. until then, please continue to enjoy our output while neglecting to consider the lack of yours.

      • Cloudboy says:

        You know, americans are used to hollywood being the center of the film world, but that’s changing as american corporations lose their grip on a monopoly of distribution. This blog is about people that work for hollywood studios- I don’t, I’m retired. I made my quick money from industrializing VFX and outsourcing it to cheaper places. Now I fly my private jet around the world with other studio execs attending film premieres with hollywood prostitutes, er, I mean actors.
        As many industry experts like Bill Gates and Thomas Friedman keep saying, a green card isn’t worth anything any more. But since you are working at the epicenter of the american propaganda machine it looks like you have bought into the american dream in a big way and can’t see that – keep living the dream.

      • vfxPeon says:

        retired? more like can’t get any work.

        i really doubt anyone with a private jet spends their time in the comments section of a vfx labor blog.

        if you’re actually “retired” and as rich as you say, why would you even waste your time here? sounds like the only one dreaming is you.

  2. sigh says:

    “more expensive to do the work in California” ??

    It’s always been more expensive, with or without subsidies…

    • VFX Soldier says:

      Do you have a source for that info?

      Even if a Cali VFX company can be competitive on price, the subsidy offered by governments like Canada would distort the price enough to cause US studios to do there work there.

  3. In an earlier post an anonymous author made a comment that needs addressing.

    blah says:
    March 10, 2011 at 12:38 pm
    Oh dear. You’ll grab any story and try to twist it into some union thing or something to do with subsidies.

    Because blah, fundamentally these two issues deal with the basic quality of life experienced by most folks (the workers) on this planet. The importance of unions should be self evident. I guess it isn’t. The fact that most of the film industry in the U.S. is organized sets certain standards and therefore also helps the non-union sectors enjoy better wages and working conditions. If there were no unions in the film industry the race to the bottom would already be over (think minimum wage) and any talk of VFX workers attempting to organize would be a non-starter. So the union “thing” is paramount if pay scales and working conditions are to be improved.

    The other issue, subsidies, unfortunately generates great passion and even greater confusion and therefore it cannot be thoroughly addressed in one post. So I’m going to concentrate on one aspect of the debate. Do film subsidies create jobs? Very few, if any. If Irish investors, in Ireland, manage to get the Irish taxpayer’s to help fund a film made in Ireland with subsidies then you could claim that those subsidies helped create jobs. And those subsidies would not be in conflict international trade agreements. But most subsidies do not create jobs, they transfer jobs from one location to another and this truth needs to be focussed on and repeated incessantly until the press is forced to acknowledge the facts. The “it creates jobs” argument is pushed by the studios for obvious reasons but it’s time to take the MPAA head on and end corporate welfare and end these beggar thy neighbor policies. In an earlier post I mentioned the law passed in Canada in 1998 that specifically targets U.S. jobs. The Canadians didn’t add visual effects until a few years later. Back then most visual effects people didn’t seem to think it concerned them because after all they were not grips or electricians or carpenters or… It was almost like that famous piece from Germany in the 1930’s. I paraphrase. They came for the communists, but I was not a communist. They came for the trade unionist, but I was not a trade unionist. They came for… etc. etc. When they came for me there was no one left.

    One last comment about today’s post from ‘sigh says’. “It’s always been more expensive, with or without subsidies…’ The statement is simply not true. I’m not sure where it came from but I wish (silly me) folks would have their facts right. Until kickbacks (subsidies) entered the picture some movies that originated in the U.S. (wall street bank financing) left Hollywood (where most of the talent and infrastructure existed) and went on “location” to other U.S. states and other countries around the world. The monetary cost of labor in most of those other “locations” was almost always lower than what Hollywood labor received. Producers and directors chose those “locations” for artistic reasons primarily, not for monetary reasons. Why is that? Because cheap labor is not enough. I mentioned talent and infrastructure because before bribery you had to take the talent and equipment with you on “location” and the local cheap labor costs were negated. Because of kickbacks infrastructure is now being built all over the world leading to over capacity which also drives down wages all the more. When another state or country offers a bigger bribe the studios will leave in a flash leaving empty stages and bankrupt vendors in their wake.

    I’ll end with a personal example of a heavily subsidized film shot in Nova Scotia. We were awarded an extensive and challenging “elements” shoot, explosions, fire, water, smoke etc. It involved some full scale but mostly high speed miniature photography. Two Canadian companies, working on the film were the competition. Our numbers came in lower and our reputation reassured the production company the work would be of high quality. We, here in Los Angeles have the experience, talent and resources to do the work cost effectively. Because the work was so specialized we were able to beat the subsidized competition. Bribery works and as long as we tolerate it the race to the bottom will accelerate.

    Soldier On Soldier

  4. yo says:

    cloudboy, are you the (in)famous jah from vfxtalk?

    • cloudboy says:

      No – I’m just another nervous Disney and Dreamworks stock investor. I hope all this talk of unions and less outsourcing doesn’t take hold!
      Thank goodness VFX Mercenary started this blog on a platform of no censorship so we can hear all sides of the story.

      • TK1099 says:

        Really? So you are afraid of a union taking hold, and what that would do to the stock you hold in the two union facilities?

        That makes no sense.

      • VFXproletariat says:

        It would make these companies less competitive against the global onslaught of un-unionised competition, and give the unioned workers a false sense that they had more rights compared to their fellow employees in countries without labor laws. Dreamworks allowing unions domestically while growing it’s investment in a non-union offshore workforce makes me uneasy -is there trouble brewing?

  5. filmworksla says:

    The WTO trade action was filed and rejected several years ago. That option is off the table as a means to fight runaway production. Incentives may not be ideal, but they are the only weapon left. That is just the reality now. Again, the trade dispute method was tried. It failed.

    • VFX Soldier says:

      For what reasons did it fail? We have never been given a clear answer.

      • filmworksla says:

        I did a FOIA request on this. Much of the reasoning from the USTR was redacted. The trade action was filed when very few US states had incentives, so it was stronger then. If it were filed today, however, it is even weaker and would stand no chance whatsoever. Claire Wright made a good case, but it was not the one that won.

  6. Marco says:

    so let me understand… you _really_ think that, if the whole vfx industry in london (just soho…) is brought back to california TOMORROW you’ll have the whole _experienced_ human resources to cover up the call? _really_?

  7. VFXproletariat says:

    Hate to say I told you so but the head of the IMF has just admitted that american baby boomers got it wrong – greed isn’t good after all…
    Mr. Strauss-Kahn called for policymakers to pay more attention to inequality and social cohesion. “The lethal cocktail of prolonged high unemployment and high inequality can strain social cohesion and political stability, which in turn affects macroeconomic stability.” He suggested that inequality, which was a factor in the Middle East, might also have been among the root causes of the global crisis, and that sustainable global growth is associated with more equal income distribution.
    “We need a new form of globalization, a fairer form of globalization, a globalization with a more human face”, he said. “The benefits of growth must be broadly shared, not just captured by a privileged few. While the market must stay center stage, the invisible hand must not become the invisible fist”.
    Mr. Strauss-Kahn stressed the virtues of enhanced cooperation and multilateralism in the post-crisis world, noting that “the great challenges of today all require a collective solution”. He cautioned countries against using currencies or trade restrictions for short-term gain.
    “In such a world, multilateral institutions—as forums of global cooperation—will become even more important. But they must stay relevant. They must adapt to the new globalization,” Mr. Strauss-Kahn stated. He pointed out that the IMF is striving to better understand the complex interconnections running through the global economy and to strengthen its ability to prevent crises, not only manage them. But this requires legitimacy, he noted, making the recent IMF governance reforms particularly important.
    http://www.imf.org/external/np/sec/pr/2011/pr11114.htm
    We are living in a very unique moment in history, a period of great upheaval. As you all know, the global financial crisis devastated the global economy and caused incalculable hardship and suffering all over the world. But it did more than this—it also devastated the intellectual foundations of the global economic order of the last quarter century.
    Before the crisis, we thought we knew how to manage economies pretty well. This “Washington consensus” had a number of basic mantras. Simple rules for monetary and fiscal policy would guarantee stability. Deregulation and privatization would unleash growth and prosperity. Financial markets would channel resources to the most productive areas and police themselves effectively. And the rising tide of globalization would lift all boats.
    This all came crashing down with the crisis. The Washington consensus is now behind us. The task before us is to rebuild the foundations of stability, to make them stand the test of time, and to make the next phase of globalization work for all. This rebuilding has three core areas—a new approach to economic policies, a new approach to social cohesion, and a new approach to cooperation and multilateralism.
    http://www.imf.org/external/np/speeches/2011/040411.htm
    http://en.wikipedia.org/wiki/Washington_Consensus#Criticisms_of_the_Washington_Consensus_policies

  8. […] It’s true, California has film subsidy program for smaller budget films and I have consistently been against it. […]

  9. companies data…

    […]California State Assembly Meeting On Film Subsidies « VFX Soldier[…]…

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