The California production community will be keeping a close eye on the state Capitol on Friday as lawmakers are set to seal the deal on the expansion to the Film & TV Tax Credit Program, offering some crucial amendments to the current initiative and boosting its funding to $750 million annually.
The Legislature is expected to vote ahead of the weekend on a trailer bill to make the legal changes needed to implement the budget they agreed upon earlier this week.
This is a win for both Gov. Gavin Newsom, who made the ambitious proposal in October, and the state’s struggling film and television industry — but it took quite a lot of people to make it happen. The industry has coalesced in recent months around this issue, bringing together production workers, union leaders and prominent filmmakers to plead their case to the decision makers in Sacramento.
Enter producer Scott Budnick, founder of impact-focused production company and the Anti-Recidivism Coalition, who was intimately involved with the efforts to get these new changes passed. Budnick, who previously was the EVP for Todd Phillips’ Green Hat Films, left that job in 2012 to found the ARC and focus his career on advocacy. Through 1Community, he’s begun to blend his two worlds even more. Most recently, the company debuted the Vince Vaughn-starring Nonnas on Netflix, also simultaneously launching an impact campaign called Stories from the Table about love, food and the people who shape our daily lives.
In addition to lobbying lawmakers himself, Budnick spent the past seven or so months leveraging groups of industry professionals and Hollywood insiders to help get the message across in Sacramento.
In a year where California faced a step budget shortfall, convincing lawmakers to prioritize Hollywood “looked like it was going to be an unbelievably heavy lift,” he told Deadline.
In the interview below, Budnick gives more insight into the process of getting the Legislature to agree on the tax-credit expansion.
DEADLINE: So first let’s talk about this most recent trip to Sacramento that you organized, which included some really prominent filmmakers urging lawmakers to pass this trailer bill for the Film & TV Tax Credit funding. How did that come together?
SCOTT BUDNICK: Oh, man. So much of it is the intersection between my producing world and my nonprofit world. Graham Taylor [co-president of Fifth Season] is my lead investor in my new company, and my board member and partner in 1Community. We just did Nonnas together, 1community and Fifth Season co-financed it. Jonah Nolan is my newest friend. Sen. Ben Allen put us together, because Jonah did an amazing tour of his sets for some of the senators. As soon as they did that first tour, Sen. Allen put me and Jonah together, and we became fast friends and partners on this initiative. But he had not been to Sacramento yet. He just hosted the senators in L.A. So he was really eager to go up and put in that sweat equity up north. I really think his set visits to Fallout were a huge game changer in how a lot of legislators began to see this thing, because they got to see the crews, the working people, diverse crews, the sides of the crews, etc. It was a show that had relocated from New York to L.A., so that was a very big deal.
Damon Lindelof, I met through through JJ and Katie Abrams a decade ago. I met Damon at their office. JJ and Katie have been longtime friends and partners, kind of more in the philanthropic and political space. I met Damon, and he became one of my founding board members at my nonprofit, Anti-Recidivism Coalition. So we’ve known each other very, very much from the philanthropic space and the political space, but not as much in the film and television space. Patty Jenkins, I developed a TV show with, but even before I developed a TV show with her, we met through a mutual friend on a tour of Folsom Prison, believe it or not, and spent a weekend up in Sacramento together, probably 15 years ago, pre-Wonder Woman. Cord Jefferson, I was just a massive, massive fan of American Fiction. Saw it multiple times. His manager actually linked us up. We had dinner at Dan Tana’s right after American Fiction came out and have just been close friends. I brought him up to San Quentin prison to play a role at the San Quentin Film Festival, which was the first film festival inside of prison. It’s just like my worlds colliding — the philanthropic world, the political world, the criminal justice world, the movie producer world.
DEADLINE: You have quite a history of leveraging these powerful people from different sectors for collective action. You’ve gotten Kim Kardashian involved with ARC and have toured multiple prisons with her. You helped organize this trip for the tax credit. You’ve worked with former President Obama. How do you position yourself to bring all of these worlds together meaningfully?
BUDNICK: The first 14 years was an incredible run with Todd Phillips, and I made a lot of relationships during those 14 years, being Todd’s producing partner and the president of his company. I think everyone that met me then would say that I treat treated people well, and I was a good person. I left the business entirely in 2012 and started ARC in 2013. I can tell you, when you leave your position of power, and you can’t cast anybody, and you can’t hire anybody, you really see who returns your calls and who doesn’t. It was just an amazing group of people, when I wasn’t doing movies for five years and I was helping people in the prison system, helping young people at the juvenile justice system, who came out of the woodwork. I got random outreach from President Obama to join his board when he was leaving the White House, for My Brother’s Keeper Alliance under the Obama Foundation [founded in 2014 in response to the death of Trayvon Martin]. I got a random text from a number I didn’t recognize that said, “Hi. My name is Kim Kardashian. My friend Allison told me about you. I’ve been following you for a while, and I’d love to figure out how we can partner together.” The next week, I had her in a women’s prison, and we’ve been partners and friends and colleagues ever since. Then other people in the business, like the Damon Lindelofs and the Patty Jenkins of the world … that reached out to me when I couldn’t do anything for them, and I wasn’t even in the business to say, “I love what you’re doing. How can I help?”
As I’ve been doing the work around changing laws for young people in Sacramento, we’ve been able to pass like 35 laws that started out as bills and became laws that Gov. Brown and Gov. Newsom signed. [I’ve been] understanding the legislative process and forming the relationships just like I did in film and television with senators and assembly folks and staffers and chiefs of staff and legislative directors, etc. It’s been over a decade making those relationships and working on those 35 bills. I did 10 concerts in prisons with Common, and we ended the concert at the State Capitol, where Common and my friend J. Cole did a concert together on the steps of the Capitol for 30,000 people. The next day, we did a lobby day in the building on a bill we were working on, and J. Cole and Common came into the Capitol and took meetings with the head of the Senate and the head of the Assembly and different legislators, and walked around the Capitol with formerly incarcerated people and victims of crime to pass this bill. So adding a little bit of a Hollywood flair to get some attention alongside academics and people with lived experience has been really successful.
DEADLINE: How do you finesse the message, on both sides of the equation, to really foster collaboration? What’s the process of getting all of these high-powered people to understand one another and find common ground?
BUDNICK: The trip with Patty and Cord and Jonah and Graham and Damon, that was the last trip, right? There were 10 trips before that that had nobody recognizable. Those 10 trips were with union workers — union grips and union electricians and union set dressers and union camera operators, and a lot of the youth that bridge the two worlds, also? I got a lot of kids that were in the foster care system, in the juvenile justice system, that as they got out and they got into their 20s and 30s went through Hollywood CPR, and are now in the union throughout the film and television business. So all the 10 trips that we did before that, our messengers were all people who had unbelievable lived experience in the film business that changed their life. They had worked for a while, and then work dried up, and they could say, ‘Hey, I was working on The Mandalorian, and then LucasFilm moved everything from L.A. to London, and thousands of people lost their jobs.’ Those were powerful, powerful stories. We spent 10 trips, probably 20 days, meeting with 100 different legislators to educate them before the recognizable names came up. I think that was crucial. Even when we had the showrunners, producers, directors, writers, with us, along with them in every meeting was a young woman who was a union laborer and two union grips and one union set dresser. They were side by side.
The week of the budget vote, literally like a week and a half ago, we were meeting with the President pro tempore of the Senate, Mike McGuire, who’s a very, very dynamic, really great human being, and he’s one of the three people that was in charge of this whole thing. It was the governor, the head of the Senate, and the head of the Assembly that ultimately made the decision about how this goes through and if it goes into a trailer bill, and if it becomes the law immediately. Obviously, we had Patty Jenkins, the director of Wonder Woman. He was excited, right? We had big names in the room. But the highlight of that meeting is when the young lady who was a laborer, Alicia Dorsch. She started telling a story about how she’s a union laborer and a set painter, and she carries two union cards, but the work dried up so much that she had to drop one of her two union cards because she couldn’t pay dues. Then with the one union card she had left, she lost her health care for her and her child. Then she had to live in her car and send her child to live somewhere else with a relative. She broke down crying, telling the story about being in the business for 20 years and everything being perfect for 19 years, and then all of a sudden, she’s homeless, living in her car, and she’s crying, and the head of the California State Senate gets out of his chair, gives her an enormous hug, looks at her eye-to-eye, and says, ‘I’m so sorry for what you’re going through.’ Having that young lady have such an intimate moment that shows how horrible life is right now for people in this business was the most important moment for Senator McGuire to understand the urgency of why this needs to go in effect in July and not January. He was so compassionate, and he was so empathetic. So to have those forces in the same room together was unbelievable.
DEADLINE: What was the journey like to get lawmakers, especially those who do not represent Los Angeles, on board with this? It’s a tough year given the budget deficit that the state is dealing with, so the Legislature was pretty divided on its priorities at one point.
BUDNICK: I will say that the vibe in Sacramento went after the Governor announced this — I think he announced it in October, and the legislators were getting sworn in in early November. I went up in early November before any campaign started, before any union was up there, before any of the studios and the MPA and anyone came out. I came in for the whole weekend for the swearing in of new legislators. The vibe was not good. It looked like it was going to be an unbelievably heavy lift. People were worried about legislators from outside of Los Angeles who didn’t feel like this helps them or their constituents and their constituents have other priorities and other struggles that needed to take priority, understandably, right? I think people worried about the most progressive legislators who thought that cuts to social safety nets and Medicaid and other things were way more important to prioritize than a film and tax credit that was really seen to be for the rich, for the big studios and streamers. I think there was a lot of misinformation from the past about the lack of diversity in the business, especially amongst the crews, because the legislators have been taken on set visits in the past where there was no diversity amongst the crews. So there were legislators saying things like, ‘My constituents are not helped by this business.’ Even those in LA were saying that. So it was a very tough start.
I got to give credit to the two budget chairs, Jesse Gabriel from Los Angeles in the Assembly and Scott Wiener from San Francisco. There’s not one second during this entire year that Scott Weiner from San Francisco, the budget chair in the Senate, ever said one thing about ‘This doesn’t help my people.’ He was supportive from day one. He understood what LA needed after COVID and strikes and fires, and both of them were unbelievable. Ben Allen, our author in the Senate, Richard Zbur in the Assembly, unbelievable. Rick Zbur was such a force, and he’s fairly new, but he was able to build a coalition and bring in other co-authors who would have probably opposed this, but he brought them in as the leaders of it. Ben Allen and Rick Zbur could have said, ‘We don’t want to share the credit. We want all the credit. We want to be the heroes.’ But then they brought in 10 to 15 other people to be the heroes alongside them. Huge shout out to Assemblyman Isaac Bryan, who was the progressive champion of the bill and who has some of the studios in his district. Huge shout out to Lola Smallwood-Cuevas, who’s a senator from Los Angeles, and Tina McKinnor, an Assemblywoman from Los Angeles. They really were unbelievably helpful. Also, Senator Caroline Menjivar, Senator Sasha Pérez, unbelievable co-authors that saw this to the finish line. I also want to give a shout out to the head of the Bay Area caucus, Senator Josh Becker. As a Bay Area guy, he could have opposed this when I was up there for the swearing in. I had breakfast with him, and I said ‘I’d really love for your help.’ And he said, ‘I don’t want to just help. I want to be your champion.’ If I can put an exclamation point on one thing, the Governor made it clear to everybody that this was a massive priority for him, and he never wavered. He never reduced that priority. He never changed and wanted to negotiate the dollar amount, even with a lot of federal cuts, etc, and the budget getting worse and worse. He led this. He was the visionary.
DEADLINE: One of the criticisms and/or concerns that kept popping up as these bills made their way through committees was the idea that these tax credits are a ‘race to the bottom.’ What was your response to that? How did you assuage those concerns?
BUDNICK: I think just showing all the legislators where other states are at. Literally, at one point, I got budgets out of films I was doing. I’m doing a Latino boxing movie that’s going to go this year or the top of next year. I budgeted California under the old credit. I budgeted New Mexico. We even budgeted shooting out of the country, in Mexico or Colombia, and it wasn’t even close compared to the California budget. But then showing them, if we then plug in the new numbers under this new credit, what it looks like, and it was unbelievably competitive. We don’t know if it’s going to be a race to the bottom, and if it ultimately is, we’re going to need to stay competitive. But it might not. This new credit is unbelievably competitive, even though it doesn’t include above-the-line. The fact that if you’re shooting outside the zone, you can be at 40 or 45% [tax credit]. If you’re shooting in LA, you could be at 35%. That’s major. I’ll be honest with you, it was more than I thought we were going to get. I thought we’d land around 30, and the fact that we landed at 35 and 40 — nd then even if you’re using local vendors, you can get up to 45% being out of the zone — that’s unbelievable. My number one passion was making sure that people who wanted to get into this business, into the unions, that didn’t have a path, would have a path for traineeships. If people were going to get government money, they would create traineeships to create opportunities for people into the unions. We also now have a 2% additional uplift if people are willing to hire for trainees on their productions.
DEADLINE: To that point, some of the most remarkable aspects of the bill are not about the $750M. There are many provisions that make the program much more competitive than it used to be. How have you started to rethink upcoming productions for 1Community now that shooting in California may be more feasible?
BUDNICK: We shot our last five movies everywhere but California. We were in Winnipeg, Canada. We were in New Jersey and New York. We were in Atlanta. So, I can’t remember the last time I shot something in Los Angeles. We’re now looking to do our Latino boxing film called Guerrero, either in Los Angeles or in El Centro, California, down by the Mexican border. We’re running both of those budgets. We’re looking to do a horror-thriller that we thought we would have to take to Vancouver or to Seattle, that takes place kind of in the woods. We’re now hoping to do that in the Redwoods of California. My motivation is hundreds of young people that I work with that are now in the unions that I want to be able to work with and hire. So we’re hoping to do the majority [of shoots in California]. Jonah Nolan said it right. He chose to bring Fallout back to Los Angeles, and it came at a financial cost, but he chose to do it. I think now that we have a competitive credit all of these producers and physical production folks at the studios need to commit to California. It’s time now to hold their feet to the fire. I’m even thinking about trying to convene studio chiefs along with their physical production folks with potentially the Governor’s team and others, to try to keep production here in California, to have them make a commitment, if there is not much difference in budget or the difference is fairly nominal, to make the decision to keep the production here.
DEADLINE: There’s also been a ton of chatter about a federal incentive. Is that the next step?
BUDNICK: The fact that so much production is moving overseas, especially to London, is an enormous threat. We talk about LucasFilm — the entire Star Wars operation with thousands and thousands and thousands of crew members up and leaving and moving to London. That was devastating. We need to stop that from happening. So I’m going to now turn my focus to the federal credit, and I think it’s crucial that we make it happen.
