|....our Web Site Administrator responds to a challenge...|
The following is an exchange between 2 activist film workers on an email list server. It was forwarded to us by an FTAC member, who writes, "What responses do those of you in the know out there have to their criticisms? I'll be glad to forward your messages--anonymously, if desired--just as I'm submitting their messages anonymously to you (by the way, they didn't ask me and I didn't ask them to do this). --John"
"I invite anyone to read FTAC's AB 484 and explain how this is NOT a tax giveaway to facilitate more runaway production. This bill has loopholes big enough to drive a 40 foot grip truck through. Nowhere does it require that subsidized production be shot within the state of California, or even the US. Rather, 484 would hand out tax money to subsidize development, distribution, and production of any portion of any film/tv production whose budget is less than $5m. That means our taxpayers will be subsidizing development of California based runaways, as well as their distribution costs when the completed production returns to our borders. In effect, 484 would facilitate runaway production by rewarding runaway producers with a 10% labor rebate on whatever California costs they incur.
It's a nice deal for the producers -- they get 30% off by going to Canada, and when they return, they get 10% off to help them distribute it, as well as 10% rebates on their own salaries. Wake up fellow workers and read the bills the corporations are paying FTAC to support.
>Are you reading the latest revision?
Yes, this is the latest version as amended and posted on the state Assembly web page.
>In that I see qualified costs regard labor contracts performed in the state (presumably of California).
Yes, the services have to be performed in the state, but there's no requirement that the production be filmed all or in part within the state. California based runaway productions will be able to collect 10% on all their labor costs performed in California involving development, post-production, distribution, publicity, producer fees, etc.
>Not that I condone this sort of thing - I do not, at all, regardless of the little details about how exactly they get their hands on our money...
Very few of the AB 484 supporters have actually read the bill, and fewer still are aware of the political scam they've been pulled into. The backstory on 484 is its an attempt by Sheila Kuehl to gain Hollywood support for her state Senate race next year. She's been termed out of her Assembly seat and she has to run for something else or leave politics. Her opponent in the primary will be Wally Knox, a strong supporter of labor, a former attorney for HERE, and the sponsor of AB 60 which will return the 8 hour day to California. AB 484 is an attempt by Sheila Kuehl to shore up her support among working people when she runs against a strong labor candidate next year. She also knows that by diverting hundreds of millions of California tax dollars to the pockets of corporate Hollywood, she'll be well assured of a strong campaign war chest from the corporations. This will be especially obvious to Sheila's corporate sponsors, because the term of the incentives is only two years and they'll need Sheila in office to help renew them in 2001.
The idea behind AB 484 is to get Sheila elected to the state Senate by exchanging subsidies for campaign contributions, which is basically how all of our $200 billion a year in corporate welfare originally started and how most politicians stay in office. I hope everyone going to Sacramento July 6 has carefully read these bills, understands their implications, and is prepared to live with the long term results.
Yes, the work must be performed within the state, but my point was that California based runaways would still be able to collect rebates on that portion of the development, post-production, and distribution costs they incur in California. This would include writers, directors and I assume producers, plus publicists, editors, etc. No doubt AB 484 will introduce a new salary system for directors where they'll be paid the minimum while on location in Canada (where they can't get rebates on their salary because they're not Canadian), and be paid the main portion of their salary in pre and post-production when they're in California.
The prevailing wage clause is another issue. What enforcement is there to see that productions actually observe the prevailing wage? They'll be filing their taxes a year or more after production has wrapped. Who'll be around to challenge them when they say they paid union wages? Your list of unions is far from complete. Security guards are represented by SEIU, LIUNA represents laborers, HERE represents food workers, UE represents office workers. The law doesn't seem to specify that all wages on a production must be at union scale, but it does say that rebates can only be paid on those wages that are.
Another question is what about health insurance and pension? Does the requirement to pay union wages mean just union scale, or does it mean the entirety of our wages which include health and pension? If so, how would they pay into our benefit system? If not, what business do we have as workers, union members and citizens providing public funds to employers who deny the basic necessities of human existence to their workers?
Also, on a non-union rebate film, which contract will they be permitted to use in order to qualify for rebates? Will it be scale? Will it be HBO? Or will it suffice to be based on whatever was the single worst contract ever made by any film union in the state? Who on the set will determine whether union pay rules are being observed? How will disputes be resolved as to whether a meal penalty was incurred, or what the proper turnaround should be?
>I'm not doubting the possibility that the whole thing is yet another scam
>by the evil powers that perpetrate such scams. Show me the money...."
Following now is an email rebuttal posted by our Web Site Administrator, Jessica McDonald, speaking as an individual, not as an FTAC spokesperson:
Hi John, I'll reply as an individual, and you may quote and credit me if you wish. As a point of order, I will be only discussing and referring to Assembly Bill 484, not Assembly Bill 358, as, Assembly Bill 358 is being sponsored and supported concurrently and is designed to accomplish the exact same objectives; and, the writer only refers to Assembly Bill 484.
1) For Reference, Go to A)
The California Senate "gopher" results page for Assembly Bill 484 Note that you do have the opportunity to "subscribe" and be notified of any changes to the page. you can also link here from the top of http://ftac.net/sen_rev_tax_comm.htmlat the FTAC Web site. Please excuse the shameless plug. At the moment, this is the most authoritative on-line source for the "filed" state of this bill.
This is the last Summary analysis of the Bill as it left the General Assembly to be read and considered by the State Senate.
A) Currently, the bill is under consideration by the California State **Senate** Revenue and Taxation Committee. At this time it would be impossible for the writer to review "The Latest Version" at the **General Assembly's ** web page. I suggest he go to the first referenced URL at the **State Senate's** web site.
B) Regarding What IS posted at the General Assembly's site: when one reviews reference 1b above, The Summary Analysis of the bill pursuant to the last action by the Assembly upon the bill, namely an Overwhelming majority vote in favor, (AYES 66. NOES 13.- 1. abstention/not present), One reads the usual language for any bill that " REPRESENTS, IN SUMMARY.." the bill itself. This is NOT a "printed version". One subjects himself to great alarm and misunderstanding when one accepts such a summary as the specific letter of the bill itself!!
While this indicates a profound ignorance of the machinery of the legislative process, I do not wish to impugn the writer as I caution him to reconsider his rhetoric as dangerous and nearly "rabble-rousing" intent on undoing a great good for us all. I can appreciate his misunderstanding, and ask that he carefully go back and reconsider the language of what he has read, in careful context with the whole. for example, the summary begins with:
(Quote) "SUMMARY : Authorizes a refundable income and bank and corporation tax credit for the cost of qualified costs in the production, development or distribution of motion picture and television production. Specifically, this bill:
1)Authorizes an income or bank and corporation tax credit equal to 10% of qualified costs. Defines qualified costs as any production labor contract performed in the state that is capitalized in the production, development or distribution of motion picture and television production. The costs must be paid pursuant to a current collective bargaining contract or paid in an amount equal to or greater than the amounts specified in a current collective bargaining agreement.
2)Defines qualified property as motion pictures and television productions that are under $5 million dollars in total cost and are either: ....." (end Quote)
This is the ONLY definable summary form of the bill available at this time, NOT the bill itself!! And it should be read ONLY as such. Language such as " Specifically this bill authorizes,..." or " Specifically this bill defines,..." means exactly THAT. This means that the written words OF THE BILL, ITSELF, will provide those definitions and authorizations. Folks, a SUMMARY is ONLY that. Consider it the "Cliff Notes" version for consideration by the legislators. This is the way the engine of government works!
In this imperfect world it allows the noble intentions of good Law to find implementation without the Ignoble demands of a fully constructed piece of legislation to only pass or fail on its immediate direct merit, being placed on citizens and their Representatives as they submit their legislative submissions to the arduous parliamentary procedures required by our constitutions and their ordinances.
Sure, sometimes flawed and undesirable laws are passed. And they do great damage. We've already endured one Civil War.
But damn it all, in this country, it is inarguable and undeniable that Most laws ARE good, and all of those that are imperfect,are struck down.
The constitutionality of NAFTA, Probably the greatest perpetrator of the cause of Runaway Production and economic turmoil in this industry IS BEING CHALLENGED, even as I write this!
Writer, pay MORE attention, KINDLY and PLEASE, to what you are reviewing. You are so wrong with your premise that any qualified argument based on same collapses without merit. Example: you write
".....Nowhere does it require that subsidized production be shot within the state of California, or even the US. .....In effect, 484 would facilitate runaway production by rewarding runaway producers with a 10% labor rebate on whatever California costs they incur."
Section 1 from the Assembly's summary, as included above, CLEARLY references that!!
This bill will not fly unless production stays here!!
In it's Original form and intent, the bill was rigid in it's requirement that 100% of the production had to occur in California. I hope you'll agree this was impossible. Even those Darn Canadians do Second Unit work here.
By forcing that issue, it was discovered that, and you probably know this, most filming does from time to time require some Second unit work outside of Calif., even if a High Majority of the settings or set filming is done here.
"Mr.Deeds" doesn't need to go to Washington, D.C. to stand on the house floor and argue for us "Little Guys," and can stay on a movie set in Burbank, but to stage an appropriate shot of him standing at the Jefferson Memorial considering his/our plight, should be able to be allowed to be done at location, without gross penalty. Have you ever been there? It is as Spiritually energizing to the soul and as extraordinary a solemn experience as one could find on planet earth. In Hollywood, we're good, but not that good! It can't be done right on the back lot. So there was **some** softening there. But not much, I assure you.
Writer, you do NOT have any information to counter this argument. it doesn't exist. Yet.
B) Further, When one goes to the STATE SENATE web site, they will NOT see a current "written" version of the bill. It is currently under consideration, and means that it is still being rewritten daily, expectantly and has been favorably reported, pursuant to the original intent of the bill. As one might view it now, in ignorance, yes, it can appear alarming. BUT, as stated above, you MUST know how to interpret what you see, and read EVERYTHING carefully! Could this bill have a BIG loophole? It certainly is NOT the one you suggest!! But, unless you read it more carefully, if there is one, you're missing it with your current interpretation.
Please, rely on current reporting of what is being done on a day to day basis. At the FTAC meetings, there are people there who offer this as best they can. These people are going to Sacramento each week to pound this out. don't trust FTAC? Okay, call Sheila Kuehl's office. Also on-line at http://democrats.assembly.ca.gov/members/a41/Or Scott Wildman's, also on-line at http://democrats.assembly.ca.gov/members/a43/.
They are both nice people, and their offices are responsive!! Tell Them what your concerns are and get an EXPERT opinion. Maybe you won't like what you hear, but it will be a reliable source that perhaps you can understand, unlike what is clearly happening here.
Please understand that while I take umbrage and am concerned with the inflammatory position you have taken, I am not trying to offend you personally.
In fact, quite the opposite. I've spent several hours composing this because, as I read through your arguments, I perceive someone who passionately cares about what is happening. Perhaps you've been hurt badly by what has happened. In either event, I do appreciate the great feelings you express regarding what is happening.
3) The exact value of the economic impact of these bill varies. However, if you read the Monitor Report, commissioned by SAG and the DGA for a National Campaign they are mounting, It indicates that OVER 10 BILLION Dollar$$ was lost to the U.S. economy SPECIFICALLY because of runaway production. You can view this at http://ftac.net/dga_sag_report/index.html (sorry again for the plug).
There is no final authority on what is lost in California. But, it was testified during the assembly hearings that is was in excess of $1.3 billion. The same folks commissioned by the assembly who arrived at this apparently very low figure testified that the impact of the revenue would amount to $8 million in rebates. Well, an Eight Million Dollar rebate to get Thirteen Hundred Million dollars worth of business back in California is EXTREMELY small potatoes. And you and I both know now it is a lot more than that for both figures! The increase in tax revenues would offset the rebate by 1000%
Sir, I'd give you 800 dollars to spend $13,000 dollars in my store so I could make $8,000 dollars gross!!! Let's put it another way: If this bill passes, as it is still ***proposed*** at least it will stimulate some substantial increase in business here. If we only get half of what we lost back, then that amount to a net loss to taxpayers of ****PLUS $$$40 MILLION****** I'll vote for that!
4) Regarding Sheila Kuehl: You may be correct about her political motives, and if that was the only reason she did this, !!!!!!YAY!!!!! So, what?
The bills, as proposed are the best thing to happen to this state in a LONG time. Good Humor makes Ice Cream in the DESERT in Las Vegas, because California has been so hard on businesses!!! There is almost NO native industry left here!
Personally, I disagree with some of her politics, but, I agree with a HELL of a lot more than I disagree. And that is because she is sincere and honest! I'm sorry, but you haven't spotted a shark here, or I'd see your point.
Further, you are directing your aim at the wrong protagonist!! The real driving force behind these bills is SCOTT WILDMAN !! He Actively Co-Authored one bill with Sheila, because he Individually authored the other! Her name is the second as a courtesy and for her support. And, Right now, he has no "nefarious motives" of which I'm aware. Another argument shot.
5) Regarding the labor issues: The IATSE contracts are coming up again for re-negotiation. That this is a major issue independently may even be the contributor to the wholesale Runaway that is happening currently. Further, the issues between the Unions and their members regarding poor representation, questionable contracts, accusations of sellout bargaining, either by desperation or device, and the lack of solidarity that seems to exist, is not germain to the core cause for passage of this bill. All your anecdotes and observations regarding the dismal state of and fear of the future for labor in this industry may be accurate, but the causes are with the collective bargaining issues themselves.
This bill is not party to nor is it intended to involve itself with legislation on labor issues and Human resource issues, ONLY the consideration of the Tax revenues and rebate allowance based on Labor costs determined by OTHER legislative and other contemporaneous standards. "Standard Union Scale", for example, is being considered.
In other words, how they allow the claimant for payroll is what they want to know. After all, the Production companies complain bitterly that it is the reason they leave California. Okay, if they can prove that cost IS substantial, they'll get credit for it. So, the more YOU make, the better the rebate for them. If H & W are considered, and I hope it is, YAY!! It will be all the more reason for your employer to provide more and better compensation, and will give IATSE another bargaining chip.
But, this bill is not intended to legislate for that. The intent is non-involvement with labor issues, EXCEPT to create an environment to produce more jobs. This is delicate and detailed language, especially as it lends itself to the kind of controversy you represent here, and It has been reported that this language has yet to be completely determined. Your voice on what should be considered for acceptance in the formula for the rebate is important.
The more considered, as you've seen, is better. The better they pay you, the better is it for them! What is WRONG with THAT?? Again, read everything carefully. Direct your comments to all of your lawmakers, Please!
Finally, regarding your closing phrase: "I'm not doubting the possibility that the whole thing is yet another scam by the evil powers that perpetrate such scams. Show me the money...."
I know this is a simply a satirical reference, but I'll let you know this: It is dangerous to give too much credit to your perceived adversary. The legislature in this state has proven that they are incapable of "scamming" us for their own good. This economy, as large as it is, serves TOO many, and has a proven track record of failure.
These bills are a departure from the crummy system that has stagnated California, and forces "New Blood", like an Infusion, into a suffering Economy. This form of Tax incentive has ALWAYS been successful in the industry and economy it was designed to aid! So of what are you afraid? What more can be taken away from you?
You get the lowest welfare, have the worst Grade School system and the worst unemployment pay rate in the U.S.
Sheesh. Give something a try will ya?
Oh, and if you are referring to those Fat Cat Producers and such in Hollywood as the Scammers here, then why is it are they Running Away? Because they're successful HERE??? I don't think so! They couldn't get the Government here to work for them that's for sure!!! Some Scam artists! Like The Three Stooges? Look, many years ago, Film production came here because Southern California Is a wonderful place to live, for many reasons. No winters, Ski in the morning, Surf in the afternoon. There will always be "Fat Cats." But obviously they are no longer smart enough to protect their home and are running away with all their money. Well, it looks like we'll have to do it for them, that is, get their Fat Butts Back Here, Spending their money HERE, where They Belong!
Jessica McDonald Ph.D.