HOLLYWOOD (CBSLA.com) — More and more production companies appear to be moving out-of-state in order to take advantage of incentives Hollywood has yet to offer.

In his first State of the Hollywood address, Los Angeles Councilman Mitch O’Farrell Thursday said that “half a million jobs are at stake.”

“We need to catch up,” the councilman told CBS2’s Art Barron. “We need to send a signal to the entertainment industry that we’re determined to keep the industry here but not to just keep it here but help it thrive and grow.”

Barron reports that Hollywood is losing out to places like New York and Atlanta. According to Barron, runaway production is even affecting the adult film industry due to the voter-backed measure requiring condoms to be used in all locally produced adult films.

“I think that Southern California can be definitely negatively impacted as the industry starts looking elsewhere for film shoots,” said Diane Duke of the Free Speech Coalition.

Barron says it’s estimated the adult film industry is a $5- to $6 billion industry in California. According to industry group FilmLA, the number of film permits in LA’s porn industry has dropped from 500 in 2012 to only 24 last year.

“Certainly, it’s affecting business. We’re all worried about it. We talked about it all the time. Some companies have less at stake and we don’t know what’s going to happen to them,” said Nina Hartley, an adult film performer.

Robert Lamkin, who provides catering to movies and television production in Hollywood, told Barron he’s had to move a number of his food trucks to New York and Georgia.

“We need a stronger rebate. We need a better rebate system to get away, for instance, from the lottery system so the studios can actually plan and forecast three years out for the projects they’d like to keep in California,” he said.