California Analysis Pours Cold Water on Expanded TV and Film Subsidies

The California legislative analyst’s office offered what it called “preliminary observations” on the push for expanded film and television subsidies in the state -- and it advices to proceed with a great deal of caution.

To date, California has offered $100 million a year in tax credits to support film production; proposed legislation would expand the program considerably. No dollar amounts have yet been assigned, but backers have talked privately of subsidies matching New York’s program, which is capped at about $420 million a year.

In its report, the analyst’s office acknowledged that larger incentives might help protect what it called a “flagship California industry,” one that has been fleeing to other states (and countries) with more generous subsidies. But the report offered a list of reasons to be wary: film and television production is growing more slowly than the rest of the economy, and may decline even with help; competing with other states could become hugely expensive; any benefits from an expanded credit would be concentrated largely around Los Angeles; and, other industries, some with arguably greater social utility, might well demand subsidies of their own.

The state analyst is expected to issue a full report on California’s film subsidies by the end of 2015.