Report: Beware the 'Race to the Bottom' of Film Tax Credits

The California Legislative Analyst's Office released a report, "Film and Television Production: Overview of Motion Picture Industry and State Tax Credits," which recommends caution by lawmakers considering an extension of the state's tax credit.

Although over half of the film industry's jobs are located in Los Angeles County, recent competition from states like Louisiana have been gaining on California by offering deep tax credits to the film industry. California even responded by creating a tax break of its own. In Los Angeles, the exodus of the film industry is referred to as "runaway production," but a new report, released yesterday by the California Legislative Analyst's Office (LAO), might have coined a new term: "the race to the bottom."

"If the Legislature wishes to continue or expand the film tax credit, we suggest that it do so cautiously," states the LAO report. "We highlight several factors to consider. Specifically (1) responding to other jurisdictions’ subsidies could be very expensive and (2) for state government, the film tax credit does not 'pay for itself.'"

Among the report's pithy observations: "Interstate and international competition could stoke a 'race to the bottom,'" even as the film industry struggles in comparison with the recovery of other portions of the economy. 

Full Story: Film and Television Production: Overview of Motion Picture Industry and State Tax Credits


Prepare for the AICP Exam

Join the thousands of students who have utilized the Planetizen AICP* Exam Preparation Class to prepare for the American Planning Association's AICP* exam.
Starting at $245
Planetizen Courses image ad

Planetizen Courses

Advance your career with subscription-based online courses tailored to the urban planning professional.
Starting at $16.95 a month
Red necktie with map of Boston

Tie one on to celebrate your city

Choose from over 20 styles of neckties imprinted with detailed city or transit maps.
Woman wearing city map tote bag

City Shoulder Totes - New Cities Added!

Durable CityFabric© shoulder tote bags available from 7 different cities.