Program to keep film crews in California left on cutting floor

By GREG RISLING
Associated Press Writer

LOS ANGELES (AP) Hollywood is seeing stars but not the kind it's accustomed to.

The state's compromise budget, which is expected to be signed by Gov. Gray Davis on Saturday, dealt a blow to the entertainment industry by ending an incentive program aimed at keeping runaway TV and film production in California.

The program called ``Film California First'' is operated by the California Film Commission and subsidizes fees paid by producers for government services during filming.

Initiated by Davis more than two years ago, the program has resulted in about $16 million in rebates for more than 2,800 productions.

``We believe that most filmmakers understand California's budget situation and share our disappointment that essential programs like Film California First will not continue at this time,'' said Karen Constine, director of the commission.

Under the proposed state spending plan, the incentive program's $8 million annual budget would be eliminated.

``I think it's a disaster for the entertainment industry,'' said Michael Apted, president of the Directors Guild of America, which lobbied for the program. ``In the long-term, it means that film production will be driven out of state.''

The loss of the program is the latest setback for Hollywood. A nonprofit agency created to curb the flow of productions from the Los Angeles area is under investigation for allegedly misusing public funds for expenses and political contributions.

The industry also is dealing with long-standing complaints about noise and other disruptions that accompany filming in neighborhoods.

``Right now the film industry feels misunderstood,'' said Jack Kyser, chief economist of the Los Angeles County Economic Development Corp. ``The biggest challenge for the motion picture industry is to articulate who is most hurt by runaway production.''

Hollywood has stepped up efforts to retain filming in California since a 1999 study revealed that runaway production cost the U.S. economy $10 billion.

Although movie and television production in this country has rebounded somewhat over the past two years, production companies are still flocking to places like Canada. That country saw revenue from filmmaking more than double from $309 million to $750 million between 1998 and 2001.

Governments have tried to play a role in keeping production in the United States. The latest attempt is a bill introduced by two California congressmen that would offer tax credits to small and independent productions with payrolls of less than $10 million.

Some industry observers said it was inevitable that the entertainment industry would be hurt by the state budget crisis.

``It's disappointing but not surprising,'' said Steve Caplan, senior vice president of the Association of Independent Commercial Producers, a trade organization. ``There hasn't been any government program that was perceived to be the silver bullet for our industry.''

(Copyright 2003 by The Associated Press. All Rights Reserved.)