More tax credits for one of L.A.'s most prosperous industries

runaway.jpgThat would be the entertainment industry, which managed to add 3,200 jobs in L.A. County over the past year. And yet the state legislature voted to extend the tax break program for movie and TV companies wanting to work in California. (Gov. Brown has not yet signed the measure.) The tax credits were first passed in 2009 in response to incentives being offered by many other states. From this week's Business Update on KPCC:

Steve Julian: Will the extra tax revenues from making movies here offset the taxes that are being lost by giving away these credits?

Lacter: That's the thing. If less money is coming in than going out, it's not exactly a great deal. Frankly, the program is too new to offer any definitive conclusions, but the bigger issue is whether the state should be in the business of giving away tax credits in the first place - especially for an industry that is in pretty good health.

Julian: How healthy is it this year compared to last?

Lacter: Well, the latest payroll numbers show that 3,200 entertainment jobs in L.A. County were actually added over the past year. You know, for all the griping about lost production, Los Angeles has the biggest workforce in the entertainment business; produces the largest number of movies, TV shows, and commercials; and is home to more sound stages, back lots, post-production houses, casting agencies, and payroll firms than anywhere else - and by a pretty good margin. So, it seems a little strange that this very well-off industry gets tax breaks, while most every other industry in the state gets nothing. Then again, if you're in show business you tend to get away with a lot.

Of course, reality hasn't meant much when it comes to so-called known as runaway production - and that goes all the way back to the 1950s when a coalition of unions began griping about lost business. In 1961, Charlton Heston of all people told Congress that foreign subsidies were doing damage to the U.S. film industry, and he urged that the government subsidize Hollywood. (they said no).

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Mark Lacter
Mark Lacter created the LA Biz Observed blog in 2006. He posted until the day before his death on Nov. 13, 2013.
Mark Lacter, business writer and editor was 59
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