California Gov. Jerry Brown is debating whether to sign off on $200 million in subsidies for Hollywood production companies amid California’s budget crisis, according to the Los Angeles Times
Supporters of the tax breaks, including the Screen Actors Guild and the Motion Picture Association of America, maintain they have a “multiplier effect” on the economy. They warn that if the subsidies are taken away, “runaway production,” or the flight of the industry to cheaper states, would become more common.
California’s nonpartisan legislative analyst's office recently concluded in a report, however, that extending the tax credit would be a net loss for the state because it results in no real economic benefit.
The report found that every dollar spent on film subsidies returns less than a dollar to the state treasury, and "perhaps well under $1.00 in many years."
Brown has until the end of the month to make his decision.
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