Sunday, December 28, 2014
FAIRFIELD-SUISUN, CALIFORNIA
99 CENTS

Movie credits: A tax break that actually works

elias column sig

By
From page A11 | May 14, 2014 |

Businesses are moving out of California – or at least building new plants in other states – in droves because this is such a high-tax state. That’s the frequent claim of Republican politicians who have tried to bludgeon Democrats for years with the issue.

The idea has been repeated so often it is widely accepted as truth, even though here’s no proof any company relocates outside California except when a move puts it closer to existing plants and assets, as when Occidental Petroleum announced an impending move from Los Angeles to Houston this spring, saying that would put management much closer to the oil wells it manages. Or Toyota moving many jobs from Torrance to Dallas, much closer to its factories.

But the tax motive in corporate moves is often overrated, with the real reasons frequently factors like land costs and lower housing expenses that ease recruiting of young employees.

Similarly, Republicans have argued for decades – without proof – that lower taxes actually lead to higher government revenues because they encourage employers to add jobs. But it’s never been proven that when corporations get tax benefits, they put the money saved into employees rather than seeing it pocketed by top management and investors.

That’s why it behooves California politicians to pay heed when a substantial study shows lower taxes in other states actually do have an impact on a particular industry and that lower taxes do add both jobs and government revenues.

About the only area that’s been proven is in movie and television production, where California has steadily lost location filming to places as varied as Pennsylvania and Georgia, New Jersey and Louisiana over the past 20 years. The majority of feature filming now takes place outside this state, even though most pre- and post-production work – everything from casting and film editing to sound dubbing and musical scoring – still is centered here.

Altogether, states gave movie and TV studios and TV commercial production houses more than $1.5 billion in tax credits and rebates last year. States actively pursue location shoots because of the revenue they bring via catering, vehicle rentals, house rentals, hotel rentals, restaurant meals and much more. Pennysylvania ponied up a $1 million tax credit to get the Denzel Washington film “Unstoppable” filmed there, as just one example.

“You just follow the money,” actor-director Ben Affleck told a reporter last year, when asked why he planned to film his upcoming “Live by Night” in Georgia. Tax credits and incentives sometimes cover as much as one-third of production costs in an industry where profit margins can be thin. For the states, this can lead to new jobs (most of them temporary) and more government revenue without the kinds of environmental problems new factories often bring. Movie makers almost always guarantee host states they will leave conditions exactly as they were before, or better.

California now offers about $100 million a year in credits, not enough to keep a lot of filming from going elsewhere, even when it means producers must pay lodging and transportation bills for actors who mostly live in California.

This state’s tax credits produced at least $1.11 in state and local tax revenues for every dollar of tax benefits deployed, concludes a study performed this spring by the usually-accurate Los Angeles County Economic Development Corp. With 35 other states now giving tax incentives for location work, California’s current credits are not enough to retain most of the production that was traditionally centered here.

Relatively small as the California film location credits have been (less than one-fifteenth of national credits from a state with about one-ninth of the national population), the study concluded the spending they helped produce came to $1.9 billion for 109 projects over the last three fiscal years, with 22,300 jobs supported. Total economic activity from those projects was $4.3 billion.

The movie tax credit, opponents say, is a giveaway to the wealthy, while the poor languish as programs helping them are steadily cut back. But if the film credits actually produce more government money (via income taxes, sales taxes and more) than they cost, that means they’re really helping keep programs for the indigent alive, even as they benefit wealthy actors and producers.

The bottom line: This is a tax credit that works for California and could work even better. That’s why it should be increased, as called for in a bill now working its way through the Legislature.

Thomas Elias is a California author. Reach him at tdelias@aol.com.

LEAVE A COMMENT

Discussion | 2 comments

The Daily Republic does not necessarily condone the comments here, nor does it review every post. Read our full policy

  • JBDragonMay 14, 2014 - 12:51 pm

    I think I got dumber reading that crap! So movie production company's flee to other states to make movies because of costs, but for every other type of business that's not a factor at all. Hahahahahahahahaha

    Reply | Report abusive comment
  • Rudy MadronichMay 14, 2014 - 4:31 pm

    Its funny how the film industry will be getting the tax breaks. I guess when you support president Obama and the liberal left you get a break but if you are a conservative,tea party type you get the IRS checking up on you.

    Reply | Report abusive comment
.

Solano News

 
New circulation director for Daily Republic has California roots

By Ryan McCarthy | From Page: A1 | Gallery

Suisun’s transformation launched 25 years ago

By Barry Eberling | From Page: A1, 4 Comments | Gallery

 
Kwanzaa educates, celebrates African-American heritage

By Susan Hiland | From Page: A3, 2 Comments | Gallery

 
AARP tax program seeks volunteers

By Susan Hiland | From Page: A3

Holiday shopping continues after Christmas

By Susan Hiland | From Page: A3

 
Rush Ranch plans birds of prey workshop

By Susan Hiland | From Page: A4, 1 Comment

Winter feeding of backyard birds

By Launa Herrmann | From Page: C4, 1 Comment

 
Weather for Sunday, Dec. 28, 2014

By Daily Republic staff | From Page: B6

 
Projects to watch in 2015

By Brian Miller and Karl Dumas | From Page: B7

Market predictions for 2015

By Bud Stevenson | From Page: B7

 
County graduates complete basic training

By Nick DeCicco | From Page: B10

 
Fairfield police log: Dec. 26, 2014

By Susan Hiland | From Page: A12

Suisun City police log: Dec. 26, 2014

By Susan Hiland | From Page: A12, 1 Comment

 
.

US / World

Shoppers brawl inside Northern California mall

By The Associated Press | From Page: A4, 7 Comments

 
Death penalty states unmoved by botched execution

By The Associated Press | From Page: A5, 1 Comment

 
Arizona police officer, suspect killed in shootout

By The Associated Press | From Page: A5, 3 Comments

 
Protester in St. Louis area charged with arson

By The Associated Press | From Page: A6

Spokesman: George H.W. Bush remains in hospital

By The Associated Press | From Page: A6

 
2 small planes collide in Maryland; no injuries

By The Associated Press | From Page: A6

Lava creeps 15 yards closer to Hawaii marketplace

By The Associated Press | From Page: A6

 
NYC officer mourned at funeral as tensions linger

By The Associated Press | From Page: A6, 1 Comment

School error takes money from staff bank accounts

By The Associated Press | From Page: A6

 
Drought, plastic bags prompt new California laws

By The Associated Press | From Page: A7, 1 Comment

 
Final goodbye: Roll call of some who died in 2014

By The Associated Press | From Page: A9, 1 Comment

Families take future war dogs into homes as foster pups

By The Associated Press | From Page: B10

 
Woman uses quilt to help those in military

By The Associated Press | From Page: B10

Del. WWII vet honored with medals 70 years later

By The Associated Press | From Page: B10

 
Snow, ice sweep Europe, stranding drivers

By The Associated Press | From Page: A10

N. Korea uses racial slur against Obama over hack

By The Associated Press | From Page: A10, 2 Comments

 
Pilot recalls last flight to Cyprus airport

By The Associated Press | From Page: A11

Wanted extremist leader surrenders in Somalia

By The Associated Press | From Page: A11

 
.

Opinion

Putin’s epic annual news conference, condensed

By Ishaan Tharoor | From Page: A8

 
Leaders fan flames of racial hatred

By Letter to the Editor | From Page: A8, 52 Comments

 
Sound Off: Dec. 28, 2014

By Glen Faison | From Page: A8

Redrawn districts made for some tight races

By Dan Walters | From Page: A8

 
.

Living

Today in History: Dec. 28, 2014

By The Associated Press | From Page: A2

 
Community Calendar: Dec. 28, 2014

By Susan Hiland | From Page: A2

Why do we celebrate Christmas, part two

By Perry W. Polk | From Page: C3

 
Comforting immigrants is nun’s mission

By The Associated Press | From Page: C3

Pope’s role in Cuba deal fractures Cuban-American flock

By The Associated Press | From Page: C3

 
Bethel Community Church buys Temple Baptist site

By Susan Hiland | From Page: A3

 
Horoscopes: Dec. 28, 2014

By Holiday Mathis | From Page: C4

My son’s cat is being neglected and I don’t know what to do

By Kathy Mitchell and Marcy Sugar | From Page: C4

 
.

Entertainment

Company loses bid for rights to Marvel superheroes

By The Associated Press | From Page: C6

 
Jonah Lehrer working on book about digital life

By The Associated Press | From Page: C6

Blagojevich brother: I was fed ‘pawn’ to get then-governor

By The Associated Press | From Page: C6

 
TVGrid

By Daily Republic Syndicated Content | From Page: B11

.

Sports

Vanden’s Koss named 2014 DR Male Athlete of the Year

By Brian Arnold | From Page: B1 | Gallery

 
Broncos see a much better Raiders team this time

By The Associated Press | From Page: B1 | Gallery

Cardinals have hopes of division crown, 12 wins

By The Associated Press | From Page: B1

 
Warriors shake off skid, beat Timberwolves 110-97

By The Associated Press | From Page: B1

No. 1 Kentucky holds off No. 4 Louisville 58-50

By The Associated Press | From Page: B1 | Gallery

 
 
Cousins leads Kings past Knicks 135-129 in OT

By The Associated Press | From Page: B2

Anze Kopitar leads LA Kings past Sharks, 3-1

By The Associated Press | From Page: B2

 
Sam: Coming out was right thing to do

By The Associated Press | From Page: B2

Vikings stadium builders work on career highlight

By The Associated Press | From Page: B2

 
Devils replace DeBoer with 3-headed coaching staff

By The Associated Press | From Page: B2

Authorities question Cubs’ Castro after shooting

By The Associated Press | From Page: B2

 
Browns suspend receiver Josh Gordon, Manziel late

By The Associated Press | From Page: B2

Sports deaths: elegant Tony Gwynn, Jean Beliveau

By The Associated Press | From Page: B2 | Gallery

 
Kessler leads No. 24 USC to 45-42 win over Huskers

By The Associated Press | From Page: B4

Jameis, Marcus and Mickey: Rose Bowl week starts at Disney

By The Associated Press | From Page: B4

 
Bowling report for Sunday, Dec. 28, 2014

By Daily Republic | From Page: B4

First Step seeks players, help for 2015 season

By Daily Republic staff | From Page: B4

 
Devil Dawgs retiring after run of success

By Daily Republic staff | From Page: B4

Virginia Tech beats Cincy 33-17 in Military Bowl

By The Associated Press | From Page: B4

 
S Carolina tops Miami 24-21 in Independence Bowl

By The Associated Press | From Page: B4

Arizona State beats Duke 36-31 in Sun Bowl

By The Associated Press | From Page: B4

 
Penn State tops Boston College 31-30 in OT in Pinstripe Bowl

By The Associated Press | From Page: B4

 
This date in sports history for Sunday, Dec. 28, 2014

By The Associated Press | From Page: B5

.

Business

 
Top business stories of 2014: US grows, world slows

By The Associated Press | From Page: B7

BP appeals rejection of removing spill claims head

By The Associated Press | From Page: B8

 
6 US cities: Good jobs but hard-to-afford homes

By The Associated Press | From Page: B12, 1 Comment

Why areas with good jobs have hard-to-afford homes

By The Associated Press | From Page: B12, 1 Comment

 
US company to open tuna cannery in American Samoa

By The Associated Press | From Page: B12, 1 Comment

Ruling opens door for cruise malpractice lawsuits

By The Associated Press | From Page: B12

 
.

Obituaries

Judy Zamora Rogers

By Nancy Green | From Page: A4

 
Concordia Albang Lichauco

By Susan Hiland | From Page: A4

Frances Cruz Pangelinan

By Nancy Green | From Page: A4

 
Oriole Ernestine Cohen

By Susan Hiland | From Page: A4

John Benjamin Calvin Adams

By Nancy Green | From Page: A4

 
Rae Jean Malveaux

By Susan Hiland | From Page: A4

.

Comics

Frank and Ernest

By Daily Republic Syndicated Content | From Page: B4

 
.

Secrets of Success 2014

120 Years: Fentons still a treat after all this time

By Susan Winlow | From Page: SOS2, 1 Comment | Gallery

80 Years: Gillespie’s adapts to meet customer needs, thrives

By Ian Thompson | From Page: SOS5 | Gallery

60 Years: Ryan’s Automotive hits milestone of service

By Ian Thompson | From Page: SOS6, 1 Comment | Gallery

55 Years: Mary’s Pizza Shack keeps dishing the pies

By Amy Maginnis-Honey | From Page: SOS7 | Gallery

50 Years: Cal Yee Farms marks half-century – and counting

By Ian Thompson | From Page: SOS7 | Gallery

40 Years: Floors To Go weathers recession, bounces back strong

By Ian Thompson | From Page: SOS8 | Gallery

40 Years: Vaca Valley Auto Parts a Fairfield mainstay

By Barry Eberling | From Page: SOS9 | Gallery

35 Years: Scandia Family Fun Center roots run deep

By Ryan McCarthy | From Page: SOS10 | Gallery

35 Years: Vogelpohl prides herself as problem solver

By Ryan McCarthy | From Page: SOS10 | Gallery

35 Years: Medic Ambulance rolling strong

By Barry Eberling | From Page: SOS10 | Gallery

30 Years: Sportabout all about tennis – and shoes of all sorts

By Jess Sullivan | From Page: SOS11 | Gallery

30 Years: North Bay Pediatrics serves children, parents

By Ryan McCarthy | From Page: SOS11 | Gallery

35 Years: More than 1,700 home sales – and counting – for Watson

By Ryan McCarthy | From Page: SOS11 | Gallery

25 Years: It’s always showtime for Fairfield’s Finger

By Tony Wade | From Page: SOS12 | Gallery

25 Years: Feins helps build memories through Air Land & Sea Travel

By Jess Sullivan | From Page: SOS13 | Gallery

20 Years: Quality breeds success for Universal Painting

By Jess Sullivan | From Page: SOS14 | Gallery

10 Years: By the People helps with basic, complex legal issues

By Susan Hiland | From Page: SOS15 | Gallery