After approving a dramatic expansion of the California production tax incentive last year, Sacramento legislators may soon come to the aid of the state’s struggling post-production industry.
Assembly Bill 2319, which passed the California State Assembly and is awaiting a vote in the State Senate, would establish a $100 million budget allocation that would give productions that do their post work in the Golden State a base tax writeoff equivalent to 35% of qualified spending, with uplifts for productions coming from out of state and productions that do music scoring that could lift the incentive rate to 50%.
The bill has received the support of Gov. Gavin Newsom, who has publicly pushed over the past two years for renewed government support for film and TV production.
For decades, Hollywood studios would do all their film editing, sound design, VFX, scoring and other post-production work in California, even on shoots done in other states and countries.
That has changed over the past two decades as other film jurisdictions, most notably New York, Canada and the United Kingdom, have offered additional tax breaks on top of their already generous incentives for productions that not only shoot there but complete the entire filmmaking process.
“California has a problem: Other states and countries have been luring away post-production jobs with lavish incentives. A California post-production tax credit is a piece of the solution,” said Motion Picture Editors Guild (IATSE Local 700) president F. Hudson Miller. “Local 700 is committed to winning an incentive that builds on our ninety-year tradition of lifting standards of employment for the world’s best post-production workers. It’s all about keeping good, union, middle-class jobs in the state that has historically been the global heart of post-production.”
One business with such jobs is Trevanna Post, which has offices in Los Angeles, New York and London and has handled finances for post-production work on films like Wes Anderson’s “The Phoenician Scheme” and Ari Aster’s “Eddington.”
Jennifer Freed, who founded Trevanna in New York in 1995, worked with other post-production workers to push state legislators in Albany to establish a post tax credit established in New York in 2010, starting at 10% of qualified spending and since rising to 35%. Around that same time, Freed opened up a Los Angeles office for Trevanna at the urging of colleagues in the industry.
But in the 16 years since, Freed said that the strong post-production industry that was present in Los Angeles when Trevanna arrived has slowly declined, so much so that earlier this year her team had to downsize their offices even as they continue to hire new employees in London and New York.
“What we’ve seen over the last 15 years is that if there is talent like a director who’s concerned about production workers then the studios will agree to shoot here in California,” Freed said. “But when it comes to where post-production is done, the studios are solely looking for the best tax incentive, and countless jobs are being forfeited to jurisdictions that have this credit.”
Glendale Assemblymember Nick Schultz, the author of AB 2319, has heard similar stories about post-production flight from California from members of IATSE post-production locals like the Motion Picture Editors Guild all the way up to top Hollywood studios like Lucasfilm’s Industrial Light and Magic, one of the forefather companies in visual effects.
“ILM has been up in the Bay Area for fifty years, and their footprint in California has drastically reduced as they’ve opened offices in Canada, England and Australia,” Schultz said. “And when these companies reduce their footprint here, they take good paying, high-paying quality jobs that provide for middle class families. Establishing a post-production tax credit is the baseline of what we can do to make our state competitive again.”
To turn this around, Freed helped establish the California Post Alliance (CAPA), a group that launched a campaign this past February to get AB 2319 passed. The group cited a commissioned study from CVL Economics claiming that since 2011, California has lost 4,400 post-production jobs, resulting in a loss of $500 million in income and $1.6 billion in economic growth.
CAPA, along with below-the-line workers union IATSE and its post-production locals like the Motion Picture Editors Guild, have urged expedited passage of AB 2319 as it will take at least six months and likely closer to a year for its impacts to be felt.
To that end, Schultz is using the same two-track playbook that the authors of the production incentive expansion ran with last year. Along with pushing for passing of AB 2319 in the State Senate, Schultz is looking to include the $100 million allocation for the program in the legislature’s budget proposal to Gov. Newsom, with whom the legislature must finalize a budget by the end of June.
“If there is a time for people in Hollywood, especially post-production workers, to call their state senators, it’s now,” Schultz said. “If we can’t get the allocation in the budget, we still have until the end of the legislative year in August to get AB 2319 passed through the Senate, but we want to get this passed now so that it can be offered to productions as soon as possible.”
It is Freed’s hope that with this tax credit, some of Hollywood’s biggest films can be at least partially made in Hollywood again, even if cameras still have to roll in faraway locales like “Lord of the Rings” in New Zealand or at British soundstage complexes like Pinewood Studios that have the size and capacity that modern blockbusters require and which legacy backlots in Los Angeles don’t have the land to provide.
If “Avengers: Secret Wars” can’t be shot in Hollywood, maybe films like it can be edited and scored in Hollywood.
“Post-production is a very mobile industry. The first ten weeks of the process is the director’s cut. You can be anywhere for that,” Freed said. “It’s when you need to decide where you’re going to do your sound, film finishing, scoring, all the deliverables, that’s when you need to pick a jurisdiction, and that doesn’t need to be decided when picking your shooting location.”
Freed said she will be traveling back up to Sacramento in the coming weeks to push to get the post tax credit in the legislature’s budget proposal and get California’s efforts to save its entertainment industry to include the workers who take over after cameras stop rolling and get Hollywood’s movies and shows in the can. She’s seen what that program has done in the Big Apple, and she’s hoping history will repeat itself.
“I hope people understand that this isn’t an anti-New York or an anti-London move,” she said. “I just really want L.A.’s post workers to flourish as much as those workers have. There’s still so many talented people working in post-production that have not left Los Angeles, and they need our help.”
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