Daily Archives: July 22, 2007

What happened in Sacramento?

The LA-based film business and its affiliated unions appear to have badly miscalculated the lay of the land in Sacramento recently and according to this article in the LA Times lost more than $145 million in tax credits aimed at securing employment in the California film industry. Other states like New Mexico and New York have passed similar measures with wide support. What went wrong?

Late last year the S.A.G. made headlines by inviting the #2 AFL-CIO leader to address them in LA, hired a senior AFL-CIO union official as their new NED and joined a new AFL-CIO coordinating body in Washington with other EMI sector unions. Why do I mention this? Because according to the LA Times the people who killed the tax credits were some of the AFL-CIO’s closest political allies! Further, the California Labor Federation, which is the AFL-CIO’s entity in this state, has one of the most effective Sacramento lobbying organizations (something I witnessed first hand when I was part of the effort to restore Cal/OSHA back in the day), led for years by Tom Rankin, who recently retired (and presumably could have been asked to help out). Shouldn’t the EMI uions like S.A.G. have been able to count on the support of the AFL in this critical battle?

It may not have helped that the SEIU-affiliated and therefore non-AFL-CIO California State Employees Association (of which I was a member and officer for several years) was led to believe that these credits were for special interest groups, as the SF Chronicle reported here: Senate convenes to debate thorny budget bill CSEA/SEIU broke away from the AFL-CIO last year and that has allowed for some thorny conflicts to develop. CSEA represents state employees and of course supports greater tax revenue. Somehow they ignored the argument that properly targeted tax credits can create larger tax revenues. Either the argument was not made effectively or not enough political pressure was brought to bear so that the CSEA would see the light.

And to make this really sting, Democratic leader Sen. Don Perata (who is regularly endorsed by the AFL-CIO and other labor groups) is quoted in the Times as saying that the tax credits would have taken money out of the mouths of needy schoolchildren! For some reason the lobbying effort around this went the wrong way from the get go. Why can’t the EMI labor movement make a winning argument? After all, they represent a huge employer that can only grow tax revenues for the state if allowed to stay competitve. This should be a no-brainer. But a similar bill failed two years ago. Perhaps instead of paying so much attention to the capitol on the Potomac, the EMI unions need to pay more attention to the prosaic but critical capitol in the Valley.

Proposed entertainment tax credits face a not-so-Hollywood ending – Los Angeles Times