Decline in film permits shows Hollywood needs more than tax credits to survive

Karen Bass is bragging about new film and TV tax incentives like a game show host giving out prizes.

It’s not working.

A new report from the nonprofit FilmLA showed that the number of local shooting days dropped by nearly 13% year to year in the second quarter. The numbers are even more stark over a five-year period — a 36% decline.

The Bass-driven incentives are helping, to a degree. The shooting day tally includes some projects that benefited from the expanded tax credits.

But tax credits weren’t enough to stop the steady decline of production in LA.

For too many Hollywood studios, the challenges of production at home in LA remain the same, no matter what incentives the city and state offer.

Permits. Unions. Crime. High gas prices. Traffic.

Tax credits haven’t been enough to battle those combined drags on the production economy.

LA’s unique challenges have pushed studios to produce in other states. Plus, Paramount might be setting up shop in Tennessee sooner rather than later.

That’s not to mention local talent fleeing the City of Angels. Emmy-winning “Lost” producer Javier “Javi” Grillo-Marxuach just announced he’s leaving LA after 33 years, citing intractable issues like the sky-high cost of living and shoddy leadership.

And he’s not alone.

Others, like veteran director John Stalberg Jr., would love to keep shooting around LA. The city’s byzantine rules and regulations have made that nearly impossible for the indie filmmaker.

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Stalberg, whose credits include the “Muzzle” franchise starring Aaron Eckhart as a tormented LA cop, says he hoped to shoot that film’s 2025 sequel in LA. He lives in the city, and the first film ended in a way that made a local shoot the organic choice.

Instead, he took his crew to South Africa for “Muzzle: City of Wolves.“

“I still live here. I must love it,” Stalberg Jr. told The Hollywood in Toto Podcast late last year. But he still has to meet his budget, and LA’s punitive permit fees make that a challenge. The sprawling union network is even worse, according to the filmmaker.

“The unions, frankly, are just committing highway robbery on productions left and right … spooking everyone off to run elsewhere,” Stalberg said.

To give the “Muzzle” sequel an authentic vibe, despite being made in South Africa, he and the production’s cinematographer decided to drive around LA filming local elements to be spliced into the finished movie.

He got some grief about those snippets, with some critics alleging he purposefully added homeless people and tents around some LA streets.

“It’s all real… I was just filming,” he said.

By shooting in South Africa, he was able to commit to 30 shooting days instead of the 15-18 days that he would be able to afford in LA.

“That allows me to make a vastly better film,” he said.

Actor Rob Lowe also weighed in on the union matter last year. The “West Wing” alum said his game show “The Floor” saved money by shooting in Dublin, Ireland, rather than LA. Lowe also called the local rules “criminal.”

Hollywood needs more than tax credits to survive. But it’s unclear where reforms will come from, or when.

Will Mayor Bass break the unions’ stranglehold on Hollywood productions? Unlikely, and that’s being generous.

Hollywood’s local decline became an issue during the recent mayoral campaigns, and it may impact the governor’s race.

Spencer Pratt, a reality show veteran-turned-mayoral candidate, vowed a dramatic overhaul of the rules. Bass and Raman countered with their own pleas to fix a system they helped make worse.

Pratt missed the cut, so change isn’t coming to Hollywood anytime soon.

Studios are voting, too — with their feet. They’re opting to take their film and TV projects elsewhere.

Christian Toto is the founder of HollywoodInToto.com and the host of The Hollywood in Toto Podcast.