Sunday, November 23, 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

Fairfield-Suisun sits between bay, valley

By Barry Eberling | From Page: A1, 10 Comments | Gallery

 
Teens at Boys & Girls Clubs get their own place

By Amy Maginnis-Honey | From Page: C1 | Gallery

Salvation Army gets ready for Thanksgiving

By Susan Hiland | From Page: A1 | Gallery

 
New mobile office adds reach to The Salvation Army

By Susan Hiland | From Page: A1

Time to start a local hall of fame

By Brad Stanhope | From Page: A2, 5 Comments

 
Conservancy plans Quail Ridge Walk in December

By Susan Hiland | From Page: A3

Film festival brings people together for good causes

By Susan Hiland | From Page: A3 | Gallery

 
Advance preparation mitigates frost damage

By Kathy Low | From Page: C4

 
Sudden Infant Death awareness and prevention

By Susan Whalen | From Page: C4

Weather for Sunday, Nov. 23, 2014

By Daily Republic staff | From Page: B6

 
 
Two injured in Fairfield shooting

By Ian Thompson | From Page: A12, 8 Comments

.

US / World

Storms raise hope in California drought

By The Associated Press | From Page: A1

 
Gambling nuke commander linked to fake poker chips

By The Associated Press | From Page: A1

Winners and losers under Obama’s immigration plan

By The Associated Press | From Page: A4, 2 Comments

 
Kohler introduces odor-eating toilet seat

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

Civic group: No Ferguson grand jury decision yet

By The Associated Press | From Page: A5

 
WWII mementos found in suitcase at thrift store

By The Associated Press | From Page: A5

 
Hawaii airline tells pilots to return $4,000 bonus

By The Associated Press | From Page: A6, 2 Comments

Dogfighting thrives in years since Vick case

By The Associated Press | From Page: A6

 
Man sets house on fire, kills responding deputy

By The Associated Press | From Page: A6

Report: Washington toddler shot playing with gun

By The Associated Press | From Page: A6

 
Police: Pregnant woman, 3 others fatally shot

By The Associated Press | From Page: A6

Official: SD man kills 4, including self, wounds 1

By The Associated Press | From Page: A7

 
Pope meets with autistic children

By The Associated Press | From Page: A7

Biden announces new aid for Syrian refugees

By The Associated Press | From Page: A9

 
AP sources: Obama broadens mission in Afghanistan

By The Associated Press | From Page: A9

Somalia’s al-Shabab kills 28 non-Muslims in Kenya

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

 
Kerry says gaps remain in talks about Iran’s nukes

By The Associated Press | From Page: A9

Iraqi forces, Islamic State group battle in Ramadi

By The Associated Press | From Page: A10

 
Japan earthquake collapses homes, causes injuries

By The Associated Press | From Page: A10

.

Opinion

 
State Capitol braces for budget battle

By Dan Walters | From Page: A8

 
Editorial Cartoon: Nov. 23, 2014

By Daily Republic Syndicated Content | From Page: A8, 1 Comment

 
Act of kindness at Raiders game

By Letter to the Editor | From Page: A8, 5 Comments

.

Living

Today in History: Nov. 23, 2014

By The Associated Press | From Page: A2

 
Community Calendar: Nov. 23, 2014

By Susan Hiland | From Page: A2

Give the gift of gratitude this holiday season

By Dalia Adams | From Page: C3

 
Buddhist community builds shrine in Pineville yard

By The Associated Press | From Page: C3

Caught up in the spirt of the music

By The Associated Press | From Page: C3

 
Hackers can get into everything, including your camera lens

By Kathy Mitchell and Marcy Sugar | From Page: C4

Horoscopes for Nov. 23, 2014

By Holiday Mathis | From Page: C4

 
Library project puts 50 years of yearbooks online

By The Associated Press | From Page: C6, 1 Comment

Metrosexuals be gone: Europe is agog for beards

By The Associated Press | From Page: C6

 
Graphic novel teaching history at Mississippi schools

By The Associated Press | From Page: C6

.

Entertainment

PUBLISHERS WEEKLY BEST-SELLERS

By The Associated Press | From Page: C2

 
Lamott offers healing words in ‘Small Victories’

By The Associated Press | From Page: C2

Eddie Izzard has book deal

By The Associated Press | From Page: C2

 
Whoopi Goldberg writing book about marriage

By The Associated Press | From Page: C2

Bryan Cranston reads profane hit nursery rhyme

By The Associated Press | From Page: C2

 
TVGrid

By Daily Republic Syndicated Content | From Page: B11

.

Sports

49ers host Redskins looking for third straight win

By The Associated Press | From Page: B1 | Gallery

 
Cousins lifts sluggish Kings over Wolves, 113-101

By The Associated Press | From Page: B1

Stanford routs rival Cal 38-17 in 117th Big Game

By The Associated Press | From Page: B1

 
Sacramento State downs UC Davis 41-30

By The Associated Press | From Page: B1

 
Vermette nets winner for Coyotes vs. Sharks

By The Associated Press | From Page: B2

Green says he’s ready to return to lineup for Broncos

By The Associated Press | From Page: B2

 
Bills practice in Detroit prepping for Jets game

By The Associated Press | From Page: B2

No. 4 Duke tops Stanford to win Coaches vs Cancer

By The Associated Press | From Page: B2

 
Vacaville Christian’s Kenyon voted Sierra Delta League MVP

By Daily Republic staff | From Page: B2

 
Suzy Whaley becomes 1st female officer at PGA

By The Associated Press | From Page: B2

Giants World Series exhibit goes on display Monday

By The Associated Press | From Page: B2

 
Oklahoma’s Perine runs for record 427 yards

By The Associated Press | From Page: B3

 
Rivalry 150 goes to Lafayette, 27-7 over Lehigh

By The Associated Press | From Page: B3

Harvard beats Yale 31-24 in The Game

By The Associated Press | From Page: B3

 
Bowling results for Sunday, Nov. 23, 2014

By Daily Republic | From Page: B4

Bocce results for Sunday, Nov. 23, 2014

By Daily Republic | From Page: B4

 
Bicycle racing for Sunday, Nov. 23, 2014

By Daily Republic | From Page: B4

Granada clings to 1-shot lead at LPGA finale

By The Associated Press | From Page: B4

 
Swiss lead France 2-1 in Davis Cup final

By The Associated Press | From Page: B4 | Gallery

 
This date in sports history for Sunday, Nov. 23, 2014

By The Associated Press | From Page: B5

.

Business

 
Tips on getting deals during Black Friday blitz

By The Associated Press | From Page: B7

Most US unemployed don’t get benefits: Here’s why

By The Associated Press | From Page: B7

 
Businesses cash in as women chase bigger butts

By The Associated Press | From Page: B7

At a Glance: Pros, cons of mobile-payment systems

By The Associated Press | From Page: B12

 
Review: No cash, cards, just mobile pay for a week

By The Associated Press | From Page: B12

Recalls this week: strollers, candles, chargers

By The Associated Press | From Page: B12

 
.

Obituaries

Leslie “Esi” Gros

By Nancy Green | From Page: A4

 
Norah Dean

By Nancy Green | From Page: A4

Florentina R. Dulay Florendo

By Susan Hiland | From Page: A4

 
Albert M. Ranzani

By Susan Hiland | From Page: A4

Arthur Irving Weiner

By Nancy Green | From Page: A4, 1 Comment

 
.

Comics