SACRAMENTO, CA - To help keep movie and television production in California, the Legislature and former celebrity Gov. Arnold Schwarzenegger gave Hollywood $500 million in the tax credits in 2009.
Now, Gov. Jerry Brown has to weigh a proposal to give the industry $200 million more, where companies can use of up to 25 percent of certain expenses to offset taxes instead of going to state coffers.
"It's been a great investment for California," Teamsters Union member Barry Broad said.
A coalition representing the Teamsters Union and others in film said the first tax break has created 39,000 jobs and provided $325 million in state and local tax revenue in the three years it's been in effect.
In contrast, the Milken Institute said in the decade prior to the tax credit California lost 36,000 production jobs and $200 million in tax revenue.
Just last month, San Francisco was able to snag Woody Allen's new movie.
"There are caterers that were hired; there are hotels that are used; there's equipment to be rented, travel arrangements, restaurants," Broad explained. "And if we want to keep it in California, we're facing a lot of competition from states and countries that provides similar kinds of incentives."
But the state is broke. Critics think the money could be better spent on programs that have been drastically cut during this bad economy. For instance, help with rising college tuition or boosting the safety net.
"We need to put money into the middle class, that's who's suffering right now," Alliance for Californians for Community Empowerment Jefferson McGee said.
A UCLA study found for every dollar the state gave in film credits, California got back $1.04 and it might be even less than that according to the non-partisan Legislative Analyst Office.
Educators said public schools could use the money. They can create jobs too by hiring more teachers or they could buy new textbooks.
"So while we're cutting public education to the bone ... and we're giving $200 million to something that doesn't have a return, we can't afford that," Public Schools Budget Advisor Kevin Gordon said.
Supporters of extending the Hollywood tax break said the studies don't take into account the big picture.
"There's a multiplier effect for each of these dollars, many more dollars are spent, but those are not always measured in these reports," Broad said.
Brown must act on the proposal by the end of the month.
By Nannette Miranda
ABC7
ABC7/KGO