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Hollywood losing its spot at the top of the movie-making roster

Hollywood

(Reuters) - Three days before the Oscars, the Los Angeles film czar and a think tank delivered some damning news to Tinseltown: Hollywood's status as the home of American film and television production is threatened because places like New York are offering better financial incentives to studios.

The study of employment and production data released on Thursday by the Milken Institute, an economic think tank, says California has lost tens of thousands of entertainment jobs to New York and other U.S. states in the past decade, and film and television productions with them.

While it may be one of the best years for high-quality film in recent memory, with nine strong films nominated for the best picture Oscar, just one of the nine was filmed in California.

Ken Ziffren, a veteran California attorney recently appointed as Hollywood's film czar by the mayor of Los Angeles, said the report showed Hollywood was in a "bad spiral," both in terms of jobs and productions leaving California.

Ziffren repeated a call for an expanded California film and tax credit, as did the Milken report - an issue that is politically controversial.

Proponents say it is vital to keep middle-class jobs and film production in the state. Opponents say wealthy Hollywood studios don't need another tax break and question whether further financial incentives will produce a net gain in jobs and revenue.

The report by the Milken Institute, headquartered in Santa Monica, California, but with a national and international perspective, said California lost 16,137 film and TV industry jobs between 2004 and 2012, based on U.S. Labor Department statistics.

During the same period, the report said, New York state gained 10,675 entertainment jobs.

"California is losing film and television productions to New York and other states," the report said. "The data shows that other states are being more effective in using their incentives to bring in new productions and create jobs."

The report said the loss of jobs was particularly troublesome because it represented the exodus of middle-class wage earners with high pay, an average of $98,500 per person, and businesses that thrive on the movie industry such as caterers.

BATTLE OF THE TAX CREDITS

California has a tax-credit program, but essentially only productions with budgets of $75 million or less qualify for the rebate of 20 percent to 25 percent.

Proponents of legislation under consideration in California want the incentives to cover big-budget movies, as well as television pilots and dramas.

New York offers tax credits of between 30 percent and 35 percent and allocates more money - $420 million annually - out of its budget to give incentives to film and television production there, roughly four times what is awarded in California.

Other states such as Louisiana, Texas and New Mexico have also drawn jobs and production from California in recent years through tax credits.

The Milken report says that production in California hit its peak in 2004, when 128 films were made there, while 50 were filmed in New York. In 2012, other states offering incentives were involved in 142 films, compared with 104 in California.

Of the nine movies nominated for best picture Oscar on Sunday, only "Her," the science fiction romantic drama starring Joaquin Phoenix and Scarlett Johansson, was made in California. It had a relatively low budget of $25 million.

(Editing by Mary Milliken and Jan Paschal)

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rlcallaway March 02 2014 at 10:09 AM

This shouldn't be a surprise to anyone living in California. The liberal community there hates business and taxes them accordingly plus doing everything they can to tell businesses how to operate. The entire state is imploding due to the extreme left wing politics, taxes, and control placed on businesses in general not just the film industry. Any sane manager would definitely leave California if he could.

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kneelingcraig March 01 2014 at 11:54 PM

After working for almost 7 years in the film industry my job dried up because the studios could use "local hires" in New Mexico, Georgia, Texas and Louisiana. When they can save on housing, per diem, car rental and travel it makes financial sense for the studio but it sucks for me. I was out of work for 17 months and now I don't even work in film anymore.

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ilove1read March 01 2014 at 9:45 PM

As goes the government these day, so goes Hollywood.

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wb7ptr March 01 2014 at 8:40 PM

Louisiana gives something like a 30 percent credit to filmmakers making a movie there. I'm involved some in film there, although not the production end. Not yet at least.

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molly2peaches wb7ptr March 01 2014 at 9:04 PM

Keep after it. Some friends of mine got electrical work on the Avengers movies filmed here in Cleveland.

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mm2uwords March 01 2014 at 8:40 PM

we forget that the film business fled to california to get cheap land including beaches, mountains, valleys and built studios for makkabelieve...the easy buy of Malibu is gone, the cheap land over, the easy permits no so easy when the hills are filled with million dollar homes, mudslides and fires...crazy that new york should be a cheap alternative but the huge warehouse spaces in brooklyn and the bronx are attractive alternatives to hollywood and allow for setting up in the digital age as oppsed to conbverting a dinosaur to today's technology

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Tom March 01 2014 at 8:36 PM

Wilmington, North Carolina. The Hollywood of the East.

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pm0501 March 01 2014 at 8:34 PM

You can make movies anywhere and there are more sound stages outside Hollywood now than ever before. Hollywood is no longer the home of the stars anymore. More would prefer to live in Anytown USA and just blend in. Many have scattered to NY,MI,LA,CO and even MT to escape the garbage of Hollywood. Why sit in a casting director's office when you can Skype an interview?

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hwy80autofanatic March 01 2014 at 8:29 PM

Lets remember California is a very Democratic liberal state and just like the children's story of the farmer's wife who killed the goose that laid the golden egg, California refuses to understand that a healthy economy based on business freedom produces wealth for everyone. Instead the libtards can't regulate and tax enough anything too successful or too rich. California is known as one of the worst states for any business and the dozens of health, environmental, air quality, water quality control agencies, et. al., can't restrict and regulate enough anything that appears to even be marginally successful. No wonder California has no auto assembly plants anymore when we once had six. Despite the utopia of San Jose, even the super rich google, ebay, and other companies would never build anything in California. Even the darling company Tesla won't build their batteries here. Libtards have already destroyed Detroit as the capital of the American automobile and they still can't figure out how it happened. A one sided government without any serious honest debate produces poverty, failure and reduced public revenue.

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NJLAGHOF March 01 2014 at 8:22 PM

Well, after all, one must realize that historically, "before Hollywood, there was Fort Lee.' Unfortunately, Edison's late starting copyright/patenting lawsuits made the "studios" move from NJ to CA to avoid the court. Glad things are coming home back East. "The Great Train Robbery" was basically made where the Rockaway Mall now stands and "The Perils of Pauline" were done just about where the George Washington Bridge is located. So, sad to see things moving from THE Tinsel Town, but times do move and hope the cinema gets better - the past few years have been dreadful rot, say the least in terms of 'art.' Yeah, the $ is there but the computer tech beats out acting and storyline. Nothing of quality and/or art . Gimme '27, '39, 7 '68 to really see something of real quality value!

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Vimala Nowlis March 01 2014 at 8:02 PM

It's not just tax credits. There is also the high cost of labor unions and supporting services, plus the nighborhoods are not friendly because they don't like the streets being shut down or the special requirements for the film-making. So why shouldn't the film industry go elsewhere that want them?

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