Flight of Big-budget Films Costs 50,000 Jobs
The loss of big-budget movies like “The Hobbit” to New Zealand and “Iron Man 3” and “Oz, The Great and Powerful” to North Carolina and Michigan, is costing California nearly 50,000 jobs and $410 million in state and local tax revenues, according to a study released Thursday by the Southern California Association of Governments.
“Even the loss of only half of that spending cost the state a significant amount of economic activity,” the report states. “It is evident that (California) is losing ground to other states and nations.”
Among the findings: California continued to see its market share erode. The study found that 75 percent of the 41 live action feature films with production budgets in excess of $75 million were filmed outside of California in fiscal 2013.
The loss of “Iron Man 3” and “The Hobbit,” Parts 1 and 2, had a combined budget of $320 million, the study notes.
As it was, California’s Film and Television Tax Credit Program returned an impressive 11 percent return on investment in its first three years and helped generate $4.3 billion in economic activity and supported 22,300 jobs, according to the study.
Among the findings:
*Under the first three years of funding, 109 film projects were funded and completed.
*Those projects generated $247.7 million in state and local tax revenues, $4.3 billion in economic output and $1.6 billion in labor income.
*For every $1 of tax credit certificate issued, total economic activity in the state increased by $19.12, total state gross domestic product increased by $9.48, and $1.11 was returned to state and local governments in the form of tax revenues.
“You cannot look at this program and not see it is a formidable economic and fiscal benefit,” said Hasan Ikhrata, SCAG executive director. “California is very much at risk of losing its film industry, and without this program the past five years, the losses would have been even more painful.”
The report was commissioned by SCAG, the nation’s largest metropolitan planning organization, and principally authored by Christine Cooper, vice president, economic and policy analysis, for the Los Angeles County Economic Development Corp.