The media in California have been celebrating recent news about its film subsidy program:
California’s film tax credit program is giving taxpayers a bang for their buck. So says a newly released study from the Los Angeles County Economic Development Corp., showing the state’s tax credit program pumped $3.8 billion into the California economy and created more than 20,000 jobs in the last two years.
Readers of my blog know I always chastise other states and countries for their film subsidy program. Much of the volatility in the VFX industry is caused by film subsidies that artificialize bids.
So I sometimes get the response from readers: “Well what about California?”
It’s true, California has film subsidy program for smaller budget films and I have consistently been against it.
Well first off, in order to have an effective subsidy, it has to be competitive. Other countries like Canada, UK, and Australia are offering subsidies that will cover 25-40% of production costs.
California’s small subsidy is ineffective because of how small it is. Even if it were big, it would hurt the industry over the long run. While you may have politicians for it now, it will all change when a Republican comes into office and mow the subsidies down as they have in Michigan and New Mexico. Then what?
It’s silly to believe that during a time when the state is making massive cuts to healthcare and education that we should give money to the big studios instead.
What all this news about the California film subsidy program shows is just how easy it is for the big studios to influence the media to report the story they want to hear. Only the LA Times reported this tidbit:
Commissioned by the Motion Picture Assn. of America, the report’s findings were seized on by supporters of the program to build support for a bill recently approved by the state Assembly that would extend funding another five years for the film tax credits, which expires in 2014.
Ask yourself this question, if the MPAA funded a report that revealed film subsidies were money losers (which they are) do you think they would let you know about it? Of course not!
The boom in film production in California has as much to do with subsidies here as it has to do with the removal of subsidies in other states. Once you eliminate the subsidies, production would come back to California. That’s why I feel it would be smarter to challenge other countries’ illegal subsidies instead.
Finally, let me point out the absurdity of the LAEDC. If you remember back a few months ago, they reported the huge loss of VFX jobs here in California.
Well it turns out the numbers they used came from the EDD under the category of “teleproduction and postproduction services” and it’s true there has been a significant drop in jobs from employers in that category.
However, what they failed to do was to actually look at which employers were not represented in that category: Lucasfilm, Imageworks, Digital Domain, Rhythm & Hues, LolaVFX, and LookFX were some of the many post-production companies that were not even included in the study!