The Golden State’s new $330 million incentive program has helped renew confidence that California policymakers won’t give up on staying competitive. But Hollywood owed its regained stature to the apparent exhaustion of its far-flung rivals. “California’s gains appear to be a direct result of a wave of disenchantment with tax incentives that has bubbled over in Maryland, North Carolina, Massachusetts and Michigan, where credits are being rolled back or eliminated,” The Wrap reported.

“Four states offered tax credits in 2002, but by 2012 that number was over 40 as legislators anxious to point to job creation and tourism opportunities opened up their wallets. The exodus rocked California’s status as the nation’s production capital, costing thousands of jobs and as much as $9 billion from its economy. Today, roughly 30 states offer incentives, with Arizona, Idaho, Indiana, Iowa, Kansas, Missouri and Wisconsin all ending their programs and others planning to do the same.”

An ebbing trend

The swing in fortunes has been dramatic and largely unexpected. A few states have dangled larger lures, boosting or expanding programs inaugurated earlier. Kentucky Gov. Steve Beshear signed a suite of incentives into law after losing out in recent years to states with more lucrative offerings. And though Massachusetts, Mississippi, New Mexico, Pennsylvania and other states scattered across the country have maintained various incentives, the shift away from the highly-competitive scene in recent years has been marked.

A stampede in the opposite direction could be in the offing. Amid stalled budget negotiations, Illinois Gov. Bruce Rauner put a freeze on applications for his state’s film tax credit. As Jason Lynch reported at Quartz, Florida’s nearly $300 million allocation in 2010 has petered out years ahead of schedule, touching off a westward production migration:

“Florida’s tax incentives had been expected to last through 2016, but funding has already run dry, and the state once known as “Hollywood East”—in the ’70s and ’80s, it often had the second busiest shooting schedule outside of California—is rapidly losing productions and crew members to other states with more generous subsidies like Louisiana and Georgia, and, ironically, California.”

Recalcitrant Republicans

State Republicans have played a particularly notable role in rolling back incentive programs. In Louisiana, presidential contender Gov. Bobby Jindal divided opinions in his home state by putting an end to its role in the incentives race. New legislation he signed “caps the amount of credits the state will redeem at $180 million each year,” Variety reported. “Industry groups fought the legislation, with some arguing that the restrictions will cause studios to look elsewhere. In fact, Louisiana’s lieutenant governor, Jay Dardenne, who is running for governor, issued a statement saying that the legislation ‘creates unnecessary instability and uncertainty in the industry.'”

Louisiana had become a regional magnet for production, Variety added, with recent successes including Fantastic Four, The Magnificent Seven and global blockbuster Jurassic World. 

Sentiments like Jindal’s have been even more pronounced among Republicans where states have simply run out of money for the relative luxury of a local entertainment industry. In Alaska, a dip in oil revenues prompted state Republicans to shut down their nascent pipeline for film and television production.

“With the state’s budget deficits growing, support for the subsidies waned in the Legislature, and Sen. Bill Stoltze, R-Chugiak, who had opposed creation of the program in the first place, sought its repeal. His legislation passed 14-6 in the Senate and 23-17 in the House of Representatives, largely along party lines with Republicans joining Stoltze in opposition,” according to Alaska Dispatch News.

Despite the program’s evident popularity, Alaska Gov. Bill Walker said he couldn’t justify the expenditure while shutting down Alaska State Trooper stations, the Dispatch News noted.

By WAYNE LUSVARDI

(Satire)

Gov. Jerry Brown may have learned in Jesuit school how to put the proverbial sacrificial lamb on the state budget altar for slaying.

Or maybe he learned from all those Hollywood cinema tycoons how to choreograph a blockbuster state budget drama where a supporting actress’s role is to die, thus making those who tried to save her heroes — and those who didn’t, villains.

Cowboy movies made into political morality plays are popular with audiences who believe there are good Democratic people like themselves who wear white hats and bad Republican people unlike themselves who wear black hats. After all, how do you sell a movie plot where the guys in the white hats — the Democrats — got California into the budget mess it faces?

Movie: Gov. Brown 2

In the 2011 movie sequel, “Gov. Brown 2,” the State Legislative Assembly (SLA) demands ransom in a budget shootout.

Brown and his cohorts in the state Legislature are promising deep across-the-board cuts to all state agencies and public schools and universities. The movie climax is the elimination of all sports at community colleges, which is bound to make the audience cry. This is like cities that play budget extortion when faced with a budget crisis by only offering to cut out popular public libraries.

Brown and the majority party legislators refuse to devise and disclose a budget that cuts $25 billion and then let the electorate vote on the continuation of a counterpart $25 billion package of temporary taxes that would be rolled over presumably forever.

Unfortunately, the state found an end-run around the Gann Act years ago that would have limited spending to population and inflation increases and averted the budget crisis the state finds itself in. SB 400 passed in 1999, spearheaded by State Sen. Diane Ortiz. It granted more generous public pensions. But it was predicated on long-term constitutional entitlement commitments without any downturn in the economy. But, hey, such stuff is for boring history books and so is not for high political drama movies.

One thing to learn when you are a movie producer: Don’t put irony into the plot. It’s way too confusing and too adult.

Proposition 25, backed by Democrats, passed in November 2010. It allowed the majority party Democrat legislators to pass a budget without a single Republican vote, provided it does not include any tax increases.

Now in a scene out of the 1941 movie “Double Cross,” it appears that the Democrats will have no choice but to eventually make budget cuts unless they can get their tax package put on the ballot by the Legislature, then passed by the voters,  without any legal challenges being upheld.

Heroine on the Train Tracks

Meanwhile, Jerry Brown and his co-producers in the Legislature tie their heroine — a package of health and welfare programs — on the train track to be run over by the proposed California High Speed Rail Project. The train also is carrying untouchable environmental, green power and stem cell research bond programs for the wealthy. That way, the governor can portray himself as a savior to the underdogs.

Forget that the Legislative Analyst’s Office recommended another round of deregulation of “categorical” jobs programs in the state education budget that would probably absorb any budget cuts.

Forget that California pays about three times as much to incarcerate prisoners as the state of Texas. If California were to outsource prisoners to other states or privatize the prisons, a huge part of the budget deficit would vanish.

Forget that the state Department of Housing has cut nearly half a billion dollars out of its budget without any layoffs for next year by just not issuing any more affordable housing bonds. Why issue any more housing bonds or have redevelopment agencies build any more affordable housing at all when there are 13,433,718 housing units in California and 12,871,191 households, according to the U.S. Census Bureau?

California has about 1.25 million surplus housing units! Shut down all affordable housing programs; they are just government jobs programs. Unaffordable housing was a social fiction created by the Housing Bubble.

Forget the five voter-approved water bonds totaling about $18 billion that went mostly for the acquisition of open space and the developing green belts around wealthy enclaves.

All of the above potential items to cut from the state budget don’t make a good movie script. The good guys have to win for movies to be successful at the ballot box.

Remember comedian George Carlin’s remark when calls for bi-partisan passage of Gov. Brown’s budget package are made:

The word “bipartisan” means some larger-than-usual deception is being carried out.

March 22, 2011