California mayors push state to lure more Hollywood productions by expanding tax breaks

LOS ANGELES (Reuters) - Legislation to expand California's tax credits for movie and TV projects will help make the state competitive against other states that are drawing big-budget productions, mayors for large cities said in a letter to lawmakers released on Tuesday.

On large film productions, the bill would make up to $100 million in qualified expenditures eligible for tax credits. It also would bring television pilots into the program.

The bill, which was to go before the state Assembly's revenue and taxation committee on Tuesday, would build on an existing state tax credit approved in 2009 that provides $100 million a year in tax credits to the entertainment industry.

Mayors of 10 major California cities, including Los Angeles, San Diego, San Francisco and Oakland, said in the letter that a decade ago, Hollywood productions were made in cities across the state. That is no longer the case, they said.

"Now California has lost nearly all big-budget feature film production and most television production to other states and nations which have ramped up their incentive programs," the letter said.

They added that the expanded tax credit is needed to make California competitive again for the film and television industry. "Too much is at stake for the people of California to let this key industry slip away," the mayors said.

A study of employment and production data released in February by the Milken Institute, an economic think tank, found California has lost tens of thousands of entertainment jobs to New York and other U.S. states in the past decade, as film and television productions have left.

California lost 16,137 film and TV industry jobs between 2004 and 2012, and in the same period, New York gained 10,675 entertainment jobs, the report said.

Most states offer tax credits to film and television productions, and California legislative officials say that amounts to $1.4 billion a year for the industry.

Critics of the tax credits say Hollywood producers play one state against another to get the best deal for their projects.

(Reporting by Alex Dobuzinskis; Editing by Sharon Bernstein and Dan Grebler)

[Image: A Los Angeles Police Department (LAPD) helicopter flies over the Hollywood sign in Hollywood, California Feb. 21, 2014. By Mario Anzuoni for Reuters.]