California & Texas Boost Film Tax Incentives | Kinolime Podcast Episode 6

Show Notes

In this insightful episode of the Kinolime Podcast, hosts John Schramm and Danny Murray dive into the major financial shifts reshaping the American film industry. Discussing the recent aggressive boosts in film tax incentives from powerhouse states like California and Texas, the hosts break down what this influx of funding means for the future of domestic film production. Whether you're an independent filmmaker figuring out where to shoot your next project or an industry veteran impacted by the recent production flight, this episode explores how these legislative changes might finally bring the magic of moviemaking back home.

Here are the key takeaways and highlights from this week's discussion:

🎬 Episode Highlights & Industry Takeaways California's Hollywood Comeback: The hosts dive into California's massive push to increase its tax incentive program to $750 million. They discuss how this aggressive move aims to recapture thousands of lost jobs and revitalize Los Angeles as the undisputed hub of the film industry.

The Texas & New York Factors: John and Danny break down how Texas is stabilizing its own program at $150 million for the year, and how New York's highly competitive incentives have completely altered Kinolime's own production plans for their upcoming film, The Waif.

The "Race to the Bottom": Danny explains the complex reality of states competing against one another for productions. They discuss how this state-to-state bidding war can create temporary booms but often fails to cultivate sustainable, long-term film communities.

The Case for a Federal Subsidy: Could the US adopt a system similar to France or Canada? The hosts passionately argue for a blanket federal film incentive, highlighting how treating the arts as a crucial cultural export could reverse the industry's collective "brain drain" and empower filmmakers to take bold creative risks.

Full Transcript

[00:00]

But the subsidy part is something that I always wrestle with because again, I love how the

[00:03]

French do it where they have a set of funds and those funds go to filmmakers to make their

[00:08]

movies every year.

[00:10]

It sustains this ability to take some swings.

[00:13]

You don't have to rely on box office returns.

[00:15]

You don't have to rely on market data.

[00:18]

Obviously, that still goes into decision making because they don't want to just write it

[00:21]

off, but the fact that they promote the arts.

[00:24]

And I think that's something in the US we're sorely lacking.

[00:31]

I'm John Tramp, head of development here at Keenaline.

[00:38]

To my right, your left is Daniel Murray, aka RC, aka Juliard, Art Steu.

[00:47]

Yeah, a formal and Sardin addition, apparently.

[00:49]

He decides.

[00:50]

Am I looking like a floating head?

[00:52]

He wore a black turtleneck.

[00:55]

It's 95% today here in Brooklyn and with a black backdrop, so go figure.

[01:00]

But I didn't want to wear like gym clothes, you know, or look to beachy.

[01:06]

But what about just like dressing up for the office?

[01:09]

No, I know, but you know, the office where I feel like that's bright.

[01:14]

Okay.

[01:15]

I didn't have available to me today, right?

[01:17]

Okay, it happens.

[01:18]

Yeah.

[01:19]

But you do look at it.

[01:20]

John, you look amazing.

[01:21]

It's like a black turtleneck days.

[01:22]

I, I used to have a few.

[01:24]

Yeah, and I have like you know, like picture of like the rock when he is in high school.

[01:28]

Yeah.

[01:29]

Like I could do it, but I'm not going to.

[01:31]

Yeah, I'm not going to.

[01:33]

What are we talking about today?

[01:34]

We're going to talk about the beignable evil money of kidding.

[01:38]

It's actually very necessary to make film and there were some really amazing news that came

[01:42]

out yesterday regarding two States, Texas and your home state, California, in regards

[01:48]

to the tax incentives.

[01:50]

So I don't want to say that Trump's plan is working, but it's interesting to hear that

[01:57]

a couple of states now are starting to see the value, or at least because we know Texas

[02:04]

put this bill in in October.

[02:06]

But the facts that-

[02:07]

Same with Cal.

[02:08]

I mean, this has been-

[02:09]

Sorry, not Texas California.

[02:10]

I just waited for like eight months.

[02:11]

The fact that it's moving forward shows that at least they are- something's happening within

[02:15]

the business.

[02:16]

I don't even want to say it's about Trump.

[02:18]

But the fact is states are coming on board and seeing the value in increasing their

[02:23]

tax incentives to bring production to their state.

[02:26]

Yeah, I mean, I think now there's- maybe it was like last year, but there's something

[02:30]

like 38 states and then a whole bunch of US territories that have some level of rebader

[02:35]

and incentive program.

[02:38]

Yeah, it's like, you know, unfortunately, California should have had an incredibly competitive

[02:45]

incentive just to retain their work a few years ago, but-

[02:51]

More than a decade.

[02:52]

We'll take what we could go.

[02:53]

It's been a while and I've looked at the great state of California for many years, so

[02:57]

I have an affinity for that state.

[02:59]

But it is- it has been portrayed whether rightfully so or not that it's a bit of arrogance

[03:06]

on California's part to not- and I remember like 15 years ago or 10 years ago when this

[03:12]

conversation was being had a bit of arrogance on the states part to not try and compete

[03:17]

with the Georgia's, the Louisiana's, out there, thinking that people just always want

[03:21]

to film in Hollywood because they should, you know, but they didn't.

[03:27]

I mean, we saw industry drop tremendously in LA.

[03:30]

People moving out of the state, different, you know, for example, Texas had a big, you

[03:34]

know, influx of Los Angeles and California filmmakers going to the state.

[03:41]

Obviously, we know Georgia and Louisiana have been huge for, you know, within the last

[03:45]

20 years in terms of their robust film program incentive.

[03:48]

So what are your thoughts on the new plan and how do you see this playing out?

[03:54]

Yeah, it's tough.

[03:55]

I mean, you know, it is important to be able to retain- for the film industry, large,

[04:02]

I think, Los Angeles as a viable shooting hub just because that is where the actors live,

[04:08]

that is where the cream of the crop when it comes to crew, when it comes to every facet

[04:12]

of the business live.

[04:16]

You know, it does a lot of the times like when you look at the actual aid data of how

[04:22]

incentive programs affect states, great for film workers, but having a state to state

[04:28]

program where states have to compete with one another and raise incentives, trying

[04:35]

to pull workers that, you know, primarily live in Los Angeles to their state to shoot.

[04:40]

Like, it ends up kind of being a race to the bottom for a lot of these states like most

[04:46]

independent studies like show that even when you factor in supplemental business expenditure,

[04:53]

like, it's like kind of not worth it.

[04:56]

It is a wash.

[04:57]

It's either a wash or not worth it for states.

[05:00]

Sure.

[05:01]

I mean, shooting isn't worth it, but it means like you can't really cultivate, you know,

[05:07]

like you see it everywhere, like you can't really cultivate like vibrant film, commute,

[05:11]

like, film communities like in places that just don't have one, like, took it, like L.A.

[05:17]

has been doing it for a hundred years, right?

[05:19]

Like, there are the creative hubs, but for the most part, it's a lot of out of state workers

[05:25]

coming in and then going back.

[05:28]

You're not really cultivating robust programs.

[05:31]

And then when you're incentive changes, it goes away, right?

[05:36]

Yeah.

[05:37]

Yeah.

[05:38]

I mean, I think it's great what California is doing.

[05:41]

I'm always for tax incentive for films.

[05:43]

I would like to see a federal incentive, you know.

[05:45]

Wait, and we're going to get there, but let's talk about, to me, the best news of this

[05:49]

is because there ain't no place like Hollywood.

[05:51]

The fact that there is going to be now an increase, I think I read to like 4,000, the

[05:56]

current 4,000 jobs to like 5,500 or so, 1500 plus new jobs, potentially.

[06:03]

We're going to be filming back to like, and I'm a New Yorker, so it's hard for me to

[06:06]

say this, but like the hub of moviemaking, like you can't argue that Hollywood is Hollywood.

[06:10]

Like this is where movies mostly should be made.

[06:14]

You know, you want to see the palm trees, the backdrops, like you want to get the best

[06:16]

actors, the best crews like you say, but it's like filming in Hollywood is something different.

[06:20]

And when I say Hollywood, I mean Los Angeles proper, but that to me is like the most exciting

[06:26]

news is that like hopefully, now it's going up to $750 million, which is ton.

[06:31]

Man, they're going to get, they're going to be back filming in LA.

[06:35]

And I think I read it could go up to 40%, which is huge.

[06:39]

Now it's at what 25?

[06:42]

Yeah, I think it's something like 35.

[06:44]

It's always 35, and then if you shoot in California outside of LA, it's like to be 4,000

[06:48]

extra five.

[06:49]

It's 25 now or 20.

[06:50]

I forget the percentages, but it's quite low.

[06:53]

It's not competitive enough to shoot it.

[06:55]

No.

[06:56]

And yeah, I mean, the great thing about shooting, it's like, I think there's Roblo said

[07:01]

something about it recently, which like, you know, I have family that made careers,

[07:07]

you know, working as crew, people, and day players.

[07:12]

And when you're in LA and when things can shoot in Los Angeles, you get like,

[07:20]

there is a, like every stage of production is very close to each other in a way that

[07:26]

doesn't really exist anywhere else, right?

[07:28]

Like you're on the lot.

[07:30]

And the writers are right nearby.

[07:32]

The best.

[07:33]

And you shoot it.

[07:34]

And like, it's the best.

[07:35]

Yeah, it is a, it's something I'm not sure if you could even quantify, but like the

[07:42]

thing that really is, I think the worst part of the industry outside of like the loss of

[07:48]

jobs for people just kind of like following tax incentives is you have a collective brain

[07:53]

drain.

[07:54]

You have like a lack of mentorship.

[07:56]

You have a lack of a fostered community where you could actually build, you know, sustainable

[08:01]

careers within the industry.

[08:03]

Yeah.

[08:04]

Because people aren't, you know, clustered around each other when they do think.

[08:09]

I have a friend who's a very, I don't want to use a prolific, but a very hard working

[08:17]

and known first AD to like second, you know, he had moved his family to Denver and then

[08:23]

just, just goes around where he can because he, LA was just wasn't working.

[08:28]

And people could cause a living one up.

[08:29]

So the fact that now this is all going to bring some dollars in, people could have been

[08:33]

working.

[08:34]

This is only upside in California.

[08:36]

Texas finally stabilizing a bit of their tax incentive program is always wonky.

[08:41]

Every year was, you know, you didn't know what was going to happen.

[08:43]

Now I think they're going to do it as a decade long thing.

[08:46]

Yeah.

[08:47]

It's like 1.5 for the, it's like 150 million for the year now.

[08:50]

Yeah.

[08:51]

Which is great.

[08:52]

And I love how Texas has been aggressive.

[08:53]

Obviously, I mentioned Georgia, Louisiana, New York, you know, super the best people don't

[08:59]

know.

[09:00]

I mean, probably the best place to shoot right now, as we're getting ready for the

[09:04]

way we're looking at New York and some of the counties outside of the city.

[09:07]

And you can get like sometime with certain things, 50% of your movie.

[09:12]

It's incredible.

[09:13]

It's not.

[09:14]

So New York hopped on that train.

[09:15]

So I love seeing these states coming in line.

[09:18]

We're going to see some other states.

[09:19]

I know Montana.

[09:20]

I've been in talks with them for the last several years about what they're going to do

[09:23]

with their programs.

[09:24]

They want to get people to shoot there.

[09:25]

But going to a further point you made, because I've always been interested as someone who

[09:29]

worked in the French film market, you know, we have a project we're doing in Canada that

[09:34]

we're learning that the Canadian system and how they subsidize their films.

[09:37]

I mean, that's always been a topic.

[09:40]

I know it's a very hard one to discuss.

[09:44]

But is this a path forward for some future federal subsidy program in cinema?

[09:51]

I mean, I really hope because, you know, pretty much like most other countries, it's this

[09:59]

tough thing where right now, you know, states are competing against one another for incentives

[10:04]

and then kind of hanging in the balance, no matter what is, well, you know, we could

[10:09]

just go to Ireland and get a better one anyway or Romania.

[10:14]

Yeah.

[10:15]

And it's like, you know, you have the same incentive, but we could pay people less over there,

[10:20]

right?

[10:21]

And then it's again, it just, I feel like it leads to like competing against the wrong

[10:26]

markets, like competing against other states.

[10:30]

And then also like, like racing to the bottom, right?

[10:35]

I think this incentive in LA is great.

[10:39]

However, you're gaining a lot of jobs, but the problem is, is like a lot of these jobs

[10:47]

in places that are already film hubs, a lot of these credits are going to places with

[10:52]

directors that have the capacity to make the film shoot there anyway, right?

[10:57]

And the actors that in big Hollywood shoots that we're going to shoot there no matter

[11:02]

what, that isn't really as much of a job gain.

[11:07]

That's just a society.

[11:08]

I disagree.

[11:09]

I think that this program is going to, again, just from being in it and hearing it, no

[11:15]

one wants to shoot in LA because you just, there's no reason to financially.

[11:18]

Like, unless your movie specifically needs it, why else has all the other hubs have exploded

[11:24]

because people left LA.

[11:26]

So the fact that this can now bring the hot, because no one has what LA has.

[11:31]

No one has Hollywood.

[11:32]

There you go.

[11:33]

I don't care.

[11:34]

Canada doesn't have it.

[11:35]

Paris, New York, Louisiana, Georgia, Romania.

[11:36]

No one has that.

[11:37]

So the fact that they're going to be as competitive with, I'll say, New York is insane.

[11:43]

Only good is going to come from them.

[11:45]

But the subsidy part, it's something that I always wrestle with because again, I love

[11:48]

how the French do it where they have a set of funds and those, those funds go to filmmakers

[11:53]

to make their movies.

[11:55]

It sustains this ability to take some swings.

[11:58]

You don't have to rely on box office returns.

[12:01]

You don't have to rely on market data.

[12:04]

Obviously that still goes into decision making because they don't want to just write it off.

[12:07]

But the fact that they promote the arts, and I think that's something in the US, we're

[12:11]

sorely lacking even in Canada, right?

[12:14]

They promote the arts.

[12:15]

Canada is not a huge film market.

[12:17]

It's got a little bit of a hub and they're able to make films year after year with their

[12:22]

subsidy program with taxpayer dollars and take swings on stuff that in this stage, where

[12:28]

we are in the film business in the US, no one would make.

[12:31]

Yep.

[12:32]

So I personally would love to see more subsidies in the, maybe, indie side of things.

[12:38]

I want to see some swings.

[12:39]

Well, I think like with this new, I think it was yesterday or two days ago of the new

[12:46]

grants that were like, you know, sent out in California.

[12:51]

I think there's only like five major studio subsidies like, it's like out of the 48

[12:57]

productions, like 43 are independent features.

[13:00]

Yeah.

[13:01]

Right?

[13:02]

Which is great.

[13:03]

Yeah.

[13:04]

But independence is a tricky word now.

[13:05]

It's a tricky word.

[13:06]

Because there are like, independent movie can go like, you know, they're like 29.

[13:09]

No, it's $30 million.

[13:10]

So I don't mean that when I say anything.

[13:11]

I mean, like, I'd love to see ten and under.

[13:14]

Yeah.

[13:15]

With maybe you only have a credit or two to your name.

[13:18]

I mean, I don't think you can, you can ostracize people by their, their past history.

[13:22]

But you know what I'm trying to say?

[13:23]

Like, I want to see some swings.

[13:24]

I want to see some art.

[13:26]

And if it doesn't work, no biggie.

[13:28]

I mean, we spend money on God knows what we look to.

[13:30]

We're not going to get into a political discussion on pork and barrel and stuff.

[13:33]

But the art is just like what kids, I mean, I do a lot of, when I was in LA, I did a lot

[13:38]

of talks within schools and to promote screenwriting.

[13:42]

And their kids are just thirsty for creative outlets.

[13:44]

But they're like, it's not in my path.

[13:45]

Or like, you know, I got to get a real job, quote unquote.

[13:48]

But the fact that what if the government could provide some, yeah, a path for that?

[13:55]

You know, I find that interesting.

[13:56]

You also have to just think about like, it's why I think a federal incentive, all these

[14:00]

new incentives are amazing.

[14:02]

A federal incentive is incredible because again, it allows real one Los Angeles can be

[14:11]

Hollywood.

[14:12]

And you can shoot there and subsidizing film there would not be the same financial burden

[14:18]

on the state of California that it is now, right?

[14:21]

Could use the infrastructure with way less financial burden.

[14:25]

But you could also then like actually foster real film hubs for scale and other places

[14:35]

where like, again, right now it's like you will see, oh, the incentive is amazing in

[14:40]

the state.

[14:41]

And Netflix or some little build these massive sound stages and people will move there or

[14:46]

they'll shoot stuff there.

[14:48]

And then it changes and it's dead.

[14:50]

I know.

[14:51]

I would love to see just a blanket incentive.

[14:53]

So again, if a movie is shot in Kentucky, you could just shoot it in Kentucky.

[15:00]

Be interesting to see now.

[15:01]

Will the other states, will this be a Donald factor?

[15:04]

We're going to start seeing, you know, tax incentives and let's say Alaska, or we're going

[15:08]

to go to.

[15:09]

They probably already have.

[15:10]

They probably already have.

[15:11]

Yeah, I mean, I don't know.

[15:12]

It would be interesting to see because I mean, this is such a huge country with diverse

[15:16]

landscapes and terrains and cultures, subculture.

[15:20]

It would be interesting to see how would the other, you know, states go in line with.

[15:24]

Where would you want to shoot the most?

[15:28]

There's a place that things are not shot.

[15:30]

Oh, man.

[15:31]

I can't think of anything that I would love at the moment.

[15:34]

What about you?

[15:35]

I don't know.

[15:36]

I mean, it's tough because like, again, a lot of states have these incentives, but they're

[15:41]

not competitive.

[15:42]

They don't have great crews or there's not really a great reason to shoot there.

[15:46]

I would love.

[15:47]

I don't know.

[15:48]

It is tough.

[15:49]

I'll say that like as a New Yorker, I'm happy that we pushed and made this aggressive

[15:58]

play now.

[15:59]

That's going to be like, it's going to be amazing.

[16:00]

We're going to shoot so much stuff in New York.

[16:02]

It's going to be insane.

[16:03]

You're going to shoot something in Ireland and then this $800 million incentive came and

[16:09]

then now that is what we're talking about.

[16:11]

That's seriously looking at New York.

[16:12]

So I love that.

[16:13]

I just want to see, yeah, I want to see all states have some aggressive incentives to

[16:18]

promote the filmmakers even in the state to cultivate and get out because I never just

[16:22]

moved to LA and like learn the ropes and you know, it's, I mean, especially with cost

[16:27]

of living now, it's insane.

[16:28]

So the fact that these states are falling in line, hopefully this will be the beginning

[16:32]

of some amazing other news to make more movies.

[16:36]

Yeah, I would love to see, again, legislators understand that also like forgetting just the

[16:44]

economic impact of film, like we are the United States of America.

[16:48]

Our biggest export is our culture.

[16:51]

If we can't shoot in America, that is a, you know, in some ways, unquantifiable loss.

[16:58]

Right.

[16:59]

It has been.

[17:00]

You see the effect on the movies over the last 15 years or so.

[17:04]

Yeah.

[17:05]

You can feel that.

[17:06]

If you can't cultivate new filmmakers and film crew workers, we, again, yeah, we will

[17:12]

lose something that is probably our biggest export to the rest of the world.

[17:16]

That's why I love the studio so much, the, the Apple TV show because you have to watch

[17:21]

it so funny because it's like, it's LA.

[17:23]

Dude, filming in Hollywood, like I'm seeing every place I used to go to and like I love

[17:26]

that.

[17:27]

I'm so happy.

[17:28]

LA, give you a round of applause, California for passing that legislation.

[17:32]

Good for you guys.

[17:33]

Is it past?

[17:34]

It's past.

[17:35]

I think I'm not sure if it's fully, but it's where they are.

[17:37]

Yeah, it's where they are.

[17:38]

We're there.

[17:39]

We're there.

[17:40]

We can say we're going to say that it's past.

[17:41]

But, um, thank you so much for tuning in and hearing us babble about, you know, some fun

[17:46]

incentives and subsidies and I should have got my calculator out.

[17:50]

Uh, we're in the final three of our keen-aligned competition, script 2.0, script to screen

[17:56]

competition.

[17:57]

So, you go out there and vote, read all three screenplays.

[17:58]

When the final push, two weeks left, you're going to make a movie.

[18:03]

Maybe it'll make me made an LA or New York or Texas with these new incentive programs.

[18:08]

So, um, on behalf of Kenel and Mom, John Schram.

[18:11]

Danny Murray.

[18:12]

Thank you so much.

[18:13]

And, uh, let's make a movie together.

California & Texas Boost Film Tax Incentives | Kinolime Podcast Episode 6

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