The VES sent a call to action for VFX subsidies in California:
First, we call upon Governor Brown and the State Legislature to immediately expand its tax incentive program for the entertainment industry and to include a focused approach concentrated on the visual effects and post production sectors of the industry.
I disagree with this idea and I’m very disappointed.
Subsidies in the VFX industry have only added fuel to the volatility in the VFX industry.
When various companies competitively bid on work, government subsidies use taxpayer money to pay the US studios to do the work in certain locations. For example, in BC, you can get 45-60% of labor costs paid to the studio.
This leads to a huge distortion in prices and forces facilities that are based in locations where there are smaller to no subsidies to either move or actually be forced to PAY for the work.
This situation was eloquently explained by VES chairman Jeff Okun and former Matte World Digital owner Craig Barron in a recent interview with KCRW which starts around the 10 minute mark.
More subsidies don’t lead to more jobs.
It’s pretty obvious that US studios are looking to pit governments against each other in the hopes of fueling a subsidy war for their films where only they end up the winner.
California Governor Jerry Brown knows this. In a recent interview with NPR he denounced film subsidies(6:00 mark):
The other states give lavish subsides to get people to make movies and we do that to a degree but were not going to have a race to the bottom where the state is supposed to pay for every private sector job that we want to attract. That is a losing strategy that I hope other states would get off.
If you are going to write Jerry Brown, instead of asking him to subsidize film production, tell him to assess a duty on US studios that utilize price distorting subsidies. It’s a cheaper alternative than trying to provide $500 Million subsidy program.