FILMING EXODUS COSTLY STUDY CITES NEED TO KEEP BUSINESS IN STATE.

Byline: Greg Hernandez Staff Writer

As Louisiana, New Mexico and other states grow more aggressive in taking movie and television production away from California, a study released Monday makes the case for the state to find ways to stem the outward flow of productions.

Conducted by the Los Angeles County Economic Development Corp., the study found that feature films, television movies, one-hour dramas, and commercials contribute millions of dollars in tax revenues to the state and have other direct and indirect economic benefits.

``We found that it's not just the jobs impacted, but the tax revenues generated by any type of filming,'' said Jack Kyser, co-author of the report.

Basing findings on figures from actual productions within the last six months, researchers looked at the cost of runaway production in terms of jobs, wages, economic output and state revenue.

Kyser, the county Economic Development Corp.'s chief economist, said loss estimates in the report are on the conservative side since they do not include revenues from local taxes and fees for California cities, counties or transportation agencies.

A feature film with a production budget of $70 million and a 75-day shooting schedule created 588 temporary jobs for cast and crew, work for 1,182 extras and the equivalent of 425 full-time indirect jobs. It generated at least $10.6 million in state tax revenues.

Also profiled were the tax-revenue benefits from films with $32 million, $17 million, and $2 million budgets, which brought in smaller amounts of state tax revenues.

Television movies of the week, once a real cash cow for Southern California, have for the most part been lured to Canada, other countries and other U.S. states that offer attractive incentives.

A typical television movie with a $4 million budget could result in $8.9 million in wages for workers connected either directly or indirectly to the production, the researchers state in the study. It would generate $12.6 million in economic activity and at least $630,000 in state tax revenues for California.

``If we could regain even a fraction of the (movie-of-the-week) business that has fled to Canada - say 20 productions a year - California would reap $12.6 million in tax revenue,'' estimated Steve Dayan, business agent for Teamsters Local 399. ``We need to find ways to increase jobs so we can keep our infrastructure strong.''

Other findings include:

-- A one-hour drama with 12 episodes resulted in economic output of $76.5 million per season, with direct and indirect workers earning a combined $44.2 million per season. Per episode, the show would generate at least $3.1 million per season if shot in California.

-- The shooting of a television commercial takes about two days, and each shoot creates temporary employment for up to 96 people and generates state income taxes of about $34,000 on the wages of workers directly and indirectly connected to a commercial production.

``I was really shocked at the results,'' said Amy Lemisch, director of the California Film Commission, one of the groups that commissioned the report. ``It really shows how powerful a generator of tax revenue these productions are.''

Kyser said that with other U.S. states offering incentives and building infrastructures for filming, California is under as much pressure from rival U.S. states as it is from other countries, including Canada, Australia and the United Kingdom of Great Britain and Northern Ireland, which have long been favored for runaway productions because of the cost savings.

``They're poaching our business, and we've got to do something about it,'' Kyser said. ``We've got to fight back.''

A bill sponsored by Assembly Speaker Fabian Nuez, D-Los Angeles, would offer a tax credit of 12 percent up to $3 million to a feature film shot in California and an additional 3 percent for a television movie. The bill is currently in the Revenue and Tax Committee of the state Senate, where it awaits a full hearing. No date has been set.

``It would bring us in line with other territories,'' Lemisch said. ``And we already have the infrastructure here, the crew base.''

The commission hopes the study information will persuade lawmakers to pass the bill.

Kyser believes California needs an even playing field on production incentives before the out-of-state flight accelerates, but he acknowledges an uphill fight in Sacramento because the perception by some that the film industry is a lucrative business that doesn't need any breaks.

``The tax-incentive program has already been attacked in Sacramento as tax breaks for an already-rich industry,'' said a frustrated Kyser. ``Los Angeles County would be so much better if Sacramento would just disappear. It's going to be a hard fight.''

Lemisch hopes the report will bolster the campaign for incentives.

``With this new research, we can specifically identify the tax dollars the state loses each time a production leaves to take advantage of aggressive incentives offered by other states and countries,'' Lemisch said. ``It is crucial that we remain competitive. Keeping production in California means more jobs, more money for small businesses, more tax revenues and more tourism.''

Greg Hernandez, [phone]

greg.hernandez(at)dailynews.com