The Animation Guild recently released a report urging California to enhance its tax incentive program in order to combat the steady flow of animation jobs moving to Canada and other locations. Currently, California’s $330 million tax incentive is limited to live-action films and TV shows. However, two bills, SB 630 and AB 1138, are being proposed to expand the program to $750 million and include animation for the first time.
The guild’s report, prepared by CVL Economics, argues that this expansion is necessary as California is falling behind its global competitors in terms of aggressive policy strategies. The report highlights the impact of outsourcing on the state’s animation talent pipeline, citing the example of “Moana 2” where much of the production was moved to Vancouver, resulting in the loss of hundreds of jobs in California.
Outsourcing has been a contentious issue between studios and the guild, leading to strikes in the past. Jeanette Moreno King, the president of the Animation Guild, emphasized that studios are now sending out entire productions overseas, including tasks like storyboarding and directing. She has been actively lobbying for the bills to expand the tax incentive program to include animation.
The report also addresses the poaching of visual effects work by Canada and other locations, arguing that California needs to invest in the future of the industry to maintain its leadership in entertainment. Recommendations include excluding VFX work from the state’s project cap and creating a carve-out for animation work within the annual allocation.
Lawmakers are currently negotiating the details of the legislation with industry stakeholders, with proposed changes including increasing the base amount of the state tax credit and providing bonuses for filming in economically depressed areas. The Alliance of Independent Commercial Producers is also advocating for the inclusion of commercial production in the state subsidy.
In conclusion, the Animation Guild’s report underscores the importance of enhancing California’s tax incentive program to support and retain animation jobs in the state. By investing in the future of the industry and addressing key issues like outsourcing and competition from other locations, California can reclaim its role in global animation production.
