A bill to extend a half-billion dollars' worth of tax credits to California moviemakers has been scaled back substantially. Good. But it would be even better if legislators held up Assembly Bill 1069 for at least a year.

The tax credits in this bill are intended to persuade movie and TV producers to keep their operations in California. Los Angeles Assemblyman and City Council candidate Felipe Fuentes introduced the bill.

For L.A. politicians, movie industry tax credit bills are always a good local campaign issue. The original movie tax credit measure was introduced in 2009 by then Assemblyman and now Los Angeles City Council member Paul Krekorian. It helped him win his seat on the council. No doubt, Fuentes hopes his will do the same for him.

According to Fuentes, more than 40 other states provide tax incentives to lure movie production and the high-paying jobs that go with it to their communities. Over the last three years, he claims, movie tax credits have resulted in $2.2 billion in direct spending and saved thousands of jobs.

But that claim is impossible to substantiate. Movie companies are in California to take advantage of unique benefits this state offers – such as a huge pool of talent, big sound stages, a moderate climate and technological know-how. Critics argue persuasively that tax credits are a waste of money, serving only to reward moviemakers for doing something they'd do anyway – make movies in California.

The Fuentes measure, which originally authorized a five-year tax credit extension, has been scaled back to a single year. But why extend them at all? The state's existing tax credits are not set to expire until 2014. A single year's extension will cost California $100 million at a time the state is struggling to balance its budget.

Lawmakers should first ask the Legislative Analyst's Office to assess the real economic benefit, if any, of movie industry tax credits. If, after that study, lawmakers wanted to extend the tax credits, they would be wise to add an "out clause" to suspend such tax breaks if state revenues in future years fell below Department of Finance projections.

Given California's precarious finances, legislators should not extend tax credits this year for moviemakers or any other industry.

Meanwhile, the governor would be wise to sign Senate Bill 508, crafted by Sen. Lois Wolk, D-Davis. Among other things, this bill would require a study, sunset provisions and performance-based measurements for all future tax breaks, as are being proposed for the tax credit extensions sought by Hollywood.

© Copyright The Sacramento Bee. All rights reserved.