As Production Jobs Flee California, Governor Gavin Newsom Pushes to Expand Film and TV Tax Credit to $1 Billion Annually

Governor Gavin Newsom is proposing expanding California’s current film and television tax credit program from $750 million to at least $1 billion annually as the state is struggling to attract entertainment industry jobs. The move comes as a report last month by FilmLA found that production levels fell 3.7 percent in the third quarter even as California has continued to enhance its tax credits. Many of the major studios and streamers are headquartered in Los Angeles, which makes the contraction in production jobs more painful. Last year, Gov. Newsom pushed to increase California’s film and TV incentive from $330 million to $750 million annually, and the state’s film commission saw an initial rise in applications before the number of productions began falling again. California is not only grappling with increased competition from states like New Jersey, New York, and Georgia that offer richer incentives, but they are also facing off against foreign production hubs such as the United Kingdom and Hungary. In a press release, Gov. Newsom said the proposed expansion would include credits for above-the-line talent, as well as rewards for companies that commit to fielding more than one production in California. If enacted, the tax credit will be extended through 2040, which would give companies more certainty about the incentives they can access. The previous incentives were scheduled to last through 2030. It would also increase independent film funding to $100 million annually, up $26 million from the current program. “California created the modern entertainment industry; we’re the capital of entertainment and we’re going to keep it here,” Newsom said in a statement. “At least $1 billion in tax credits means more investment flowing into our economy and more opportunity across the industry. Through this expansion, we will maintain the momentum and success of our historic expansion last year.” The governor also urged national lawmakers to pass a federal film and television incentive, which could augment states’ efforts to bolster local production. “States can’t shoulder the cost alone, which is why I am calling on Congress to back up an expanded tax credit by passing national film and TV tax credit legislation already on the table,” Newsom said.