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March 16th, 2005

City keeping out of the action

A majority on the council can't agree to a resolution to investigate filming subsidies from other countries.

By Mark R. Madler, The Leader

DOWNTOWN BURBANK -- The City Council could not reach consensus Tuesday on a resolution supporting a call for an investigation into foreign subsidies contributing to film and television production leaving the state.

The decision disappointed dozens of members of the Film and Television Action Committee, who crowded the council chambers at City Hall. But the organization will be back April 26, when the matter comes before the council again, said Tim McHugh, a member of the action committee and owner of Burbank special-effects firm Area 51.

"We feel that we will ultimately prevail because there is a groundswell of support from union members that union leaders cannot ignore," McHugh said.

The action committee had come before the council Feb. 8. Members asked for a resolution supporting the group's call for an investigation by the U.S. Trade Representative on whether foreign subsidies for film and television work violate trade agreements.

At that meeting, the council voiced support for such a resolution. But a staff report for the members for Tuesday's meeting recommended instead that the city track the success of federal and state legislation aimed at preventing runaway production, and report back at a later date.

Council members Todd Campbell and Stacey Murphy did not support the resolution because they were not sure a resolution would be effective. Councilman Jef Vander Borght was absent from the meeting, resulting in a 2-2 tie when the resolution was voted on.

Campbell then made a motion to adopt the staff recommendation.

"If we are going to offer incentives, we should aim them at areas where the state is hit the hardest," Campbell said.

There are two pending state assembly bills and one pending state senate bill meant to strengthen local film production activity, according to the city's staff report.

Amy Lemisch, director of the California Film Commission, has been a major player in the legislation, which still needs to be finalized.

The bills are a tax credit to productions that do 75% or more of their filming in the state and will target productions that are most susceptible to being lured overseas, Lemisch said.

Gov. Arnold Schwarzenegger has given his backing to the bills, and his experience in the film industry means he has seen firsthand how the industry works, Lemisch said.

"He understands budgetary constraints and that can only help us," Lemisch said.

According to city statistics, The Walt Disney Co. and Warner Bros. account for 11,000 employees in the city. All told, entertainment and media-related companies are 30% of the city's 99,000 workers.

The city has received letters in opposition to the resolution from the Motion Picture Assn. of America, the Art Directors Guild, the Scenic Title Graphic Artists union, the Directors Guild of America and the International Alliance of Theatrical Stage Employees.

With other states such as New York, Illinois and New Mexico offering tax incentives, and another half-dozen looking to do so, the pending legislation was applauded by Melissa Patack, the MPAA's vice president for California governmental affairs.

"It's good for California to take notice and keep the playing field level," Patack said.

The Motion Picture Assn. of America is an organization representing the seven major studios -- including three based in or near Burbank: Disney, Warner Bros. and NBC Universal.

Cost savings to studios has led to the filming of TV shows and movies in Canada, Australia, New Zealand, Eastern Europe and England, where expenses are cheaper and tax credits and other financial incentives are offered by their governments.

Studies for the Screen Actors Guild and the U.S. Commerce Department estimate a loss of billions of dollars to the U.S. economy because of runaway production.

The Film and Television Action Committee is raising money to pay for legal help to file a challenge with the U.S. trade representative, arguing that overseas subsidies violate free-trade agreements.


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