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Ear to the Ground

Calif. Governor, L.A. Mayor Push Plans to Boost Entertainment Tax Credit, Minimum Wage

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Posted on Aug 27, 2014

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On Wednesday, California Gov. Jerry Brown and Los Angeles Mayor Eric Garcetti were inching closer to resolution on two big economic goals for the state and city, respectively.

Brown was busy tackling the pressing issue of how to woo film and television productions back after a lengthy era of mass exodus spurred by better deals on tax credits in other states. As the Los Angeles Times reported that morning, Brown has given the green light to a measure offering a big boost in funding for the Golden State’s tax-credit program:

The compromise would increase funding to $330 million a year over the next five years. While that falls short of the $400 million annually sought by backers, the amount would more than triple the current level of funding.

AB 1839 also would allow more projects to qualify, including new network television dramas and big-budget studio movies. It would also scrap a controversial lottery system used to divvy up funds. Instead, tax credits would be allocated based on how many jobs projects would create.

The deal is expected to clear the state Senate by the end of the week.

Meanwhile, in L.A., Garcetti was weighing a plan to increase the city’s minimum hourly wage by about $4.50 over the next three years, which would put it near $13.50 by 2017.

Should he go forward, Garcetti will be tasked with convincing local business leaders that the wage increase will have a positive overall impact. Here’s more on that challenge from the Los Angeles Daily News:

Garcetti’s office has quietly been holding meetings with business leaders in recent weeks to garner support for a wage increase. Under one scenario presented by Garcetti’s office, the minimum wage would rise $1.50 each year until 2017.

Stuart Waldman, president of the Valley Industry and Commerce Association, said VICA is expected to discuss Garcetti’s proposal at its board meeting on Thursday. It’s expected the VICA board will oppose the proposal, Waldman said.

[...] But the proposal drew praise from philanthropists such as billionaire Eli Broad, the co-founder of KB Home and a former Sun America executive. “If Los Angeles is to maintain our standing as a world-class city, we need to increase the minimum wage,” Broad said in a statement. “Raising the minimum wage would help lift people out of poverty and stimulate our local economy.”

Developer Rick Caruso, another billionaire, publicly stated earlier this year that he supports raising the city’s minimum wage.

The proposal on Garcetti’s desk still falls short of the goal of lifting the bar to $15 an hour (plus workers’ ability to form unions) that some labor activists are backing. Seattle officials voted unanimously in June to bring their city’s pay scale to the $15-an-hour level over the next few years, although opponents are challenging that move through campaigns and courts.

—Posted by Kasia Anderson

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