MOVING PICTURES CALIFORNIA'S RUNAWAY PRODUCTION ISN'T GOING FAR; OTHER STATES ARE LURING FILMMAKERS.

Byline: Greg Hernandez Staff Writer

When director Taylor Hackford was looking to bring ``Ray'' to the screen within the confines of a tight budget, he found the city of New Orleans more than willing to meet his needs, even offering free hotel accommodations for his crew.

``I don't think there's going to be any reason to take a film to Canada very soon,'' Hackford said recently, referring to his decision to shoot ``Ray'' in Louisiana and to the increase of various state government incentives for filmmakers.

Runaway production, the growing phenomenon that has seen numerous projects lured from Southern California to foreign countries extending from Canada to Australia because of financial incentives, is going increasingly domestic. States led by Louisiana, New York, Illinois and New Mexico are building up their film production infrastructures and coming to town to aggressively court producers.

In what one film commission production coordinator said could best be described as ``infighting,'' state film office officials are dropping in on movie executives at their studios and hosting lunches and mixers as they tout the latest incentives being offered by their states.

``We have people coming through our offices from South Carolina, Illinois and other states all trying to offer free office space or give you equipment for free. This is happening frequently,'' said one Disney executive. ``They are thinking outside the box and this can affect bottom-line decisions.''

Some states are making even bolder statements. At a jam-packed Producers Guild of America breakfast held at West Hollywood's Pacific Design Center in January, the Virginia Film Office co-sponsored the event and handed out hundreds of its bulky, 336-page production services directories to the industry's power players.

``I think that this just illustrates how these other states see the value of this business; everybody wants a piece of it,'' said Amy Lemisch, director of the California Film Commission. ``It's very good, high-quality well-paying jobs and a clean, nonpolluting industry. A production will come in and pour lots of money into the local economy. And when they leave, they pretty much leave it the way the way they found it.''

Lemisch admitted that California needs to ``level the playing field'' for people doing the movie budgets, with some rival states offering as much as a 25 percent tax break to productions.

Louisiana has been a particular hot spot recently, with producers warming to such incentives as a 15 percent tax credit on a movie's budget - provided it's more than $8 million - plus a 20 percent tax credit on payroll of all Louisiana hires.

``All the King's Men,'' starring Sean Penn, Kate Winslet and Jude Law, began shooting in New Orleans back in December, and it and the big-screen version of ``The Dukes of Hazzard'' are among the projects currently filming in the state.

``Louisiana's business has gone through the roof due to their very aggressive approach to getting films to shoot there,'' said producer Kathleen Courtney, chair of the Producer's Guild of America's FilmUSA Committee.

``I did a movie in Louisiana (``Because of Winn-Dixie'') that was originally going to shoot in Florida, but because of incentives, we shot the entire thing in Louisiana. We were able to get the picture green-lit because the incentives were so lucrative.''

Nevada doesn't offer much in the way of tax breaks but boosts business with free government permits, a hotel tax rebate, and a film-friendly attitude.

``We're very proactive in the pursuit of production,'' said Edward Harran, film resource coordinator for the Nevada Film Office. ``We are a great destination production town, not a lot of red tape. Our proximity to Los Angeles helps us get a lot of production, and success of shows like `Las Vegas' and `CSI' helps to promote the allure of Las Vegas.''

Courtney said the Producers Guild formed its FilmUSA committee to inform its members of all filming incentives being offered domestically in order to encourage productions to stay in the United States rather than going to a foreign country.

``When you take a film on location, you have to pay for housing per diem and various increases in pay, so these tax incentives that exist in other states have been lucrative enough to offset those costs in many cases,'' she said. ``California has the benefit of being able to shoot at home without distant location costs but at this time, there's no incentive program in place.''

To be sure, California is still very much the major player, its vast infrastructure firmly in place and a deep pool of workers available. The usually predictable sunny weather provides a further edge.

This month alone, such high-profile projects as ``The War of the Worlds'' starring Tom Cruise and directed by Steven Spielberg, ``The Bad News Bears'' with Billy Bob Thorton and Greg Kinnear, and the Tim Allen- headlined remake of ``The Shaggy Dog'' were shooting in Los Angeles.

Other parts of the region have also enjoyed some high-profile shoots, including Long Beach for several scenes of Oscar Best Picture nominee ``The Aviator'' and in the Inland Empire where parts of the box office smash ``Meet the Fockers'' were shot.

Production companies had been reluctant in the past to travel to the Inland Empire because if productions move out of a 30-mile zone around the Los Angeles region, they face paying extra per diem costs.

But with more and more below-the-line workers moving to the area, there are more local crews available. Parts of the upcoming drama, ``Mr. and Mrs. Smith,'' starring Brad Pitt and Angelina Jolie, were shot near Victorville, as were scenes of the latest Jamie Foxx movie ``Jarhead.''

Said Lemisch: ``I hear, almost across the board, from low budget or studio or TV movie producers, they would rather be (in Southern California) if they have a choice.''

California now seems determined to not just sit back as rival states cook up these incentives and take their productions elsewhere.

In August 2003, budget woes forced the state to eliminate Film California First, an incentive program that allocated $21 million in recent years in an attempt to keep more movie and television productions in California.

The program had benefited 3,500 productions over a two-year period by rebating certain production costs associated with filming on public property.

Earlier this month, Gov. Arnold Schwarzenegger said at the Sacramento premiere of the movie ``Be Cool'' that he was prepared to use his political clout and star power to attain tax breaks that would keep more productions in California.

In 2002, Schwarzenegger took a cut in salary for ``Terminator 3: The Rise of the Machines,'' his last feature film before becoming governor, in order to keep the project in California. The governor now is fighting something of a perception problem, however, with the state trying to close a multibillion-dollar budget deficit.

But proponents of tax breaks for the entertainment industry point out that this isn't legislation aimed at helping out Schwarzenegger's powerful Hollywood friends. It's to keep people like camera operators, grips, scenery makers and costumers employed and to help ancillary businesses like restaurants and caterers.

``It's far more important to the below-the-line workers and local businesses than it is to studios,'' Lemisch said. ``We have the best talent pool, from in front and behind the camera.

Greg Hernandez, [phone]

greg.hernandez(at)dailynews.com

CAPTION(S):

2 photos, box, map

Photo:

(1 -- color) A film crew blocks out a scene as it films the new television show ``LAX'' in Terminal 1 at Ontario International Airport.

Marc Campos/Staff Photographer

(2) Director Taylor Hackford consults with ``Ray'' star Jamie Foxx on a scene. Parts of the movie were filmed in New Orleans, La.

Box/Map:

Runaways Staying in the USA

SOURCE: Daily News research by Greg Hernandez