Gov. Gavin Newsom wants to strengthen California’s film industry
Gov. Gavin Newsom will announce a proposal Sunday to strengthen California’s struggling TV and film industries, his office said in a statement.
Newsom is expected to appear at a studio lot in Los Angeles to make the announcement, along with entertainment industry leaders and labor unions. California provides $330 million annually in tax credits to the industry, but that incentive lags behind Georgia, New York and countries like Britain and Canada.
The governor is expected to propose an increase in the tax credit, which would move through the budget process in the Legislature next year.
Filming in Los Angeles has declined dramatically in recent years allow data from FilmLA. The total number of admission days in the third quarter of 2024 was 50% lower than the same quarter in 2021, and 36% below the five-year average.
Script production came to a virtual standstill during last year’s actors’ and writers’ strikes. But the post-strike recovery has stalled and production levels have fallen steadily since early 2024. Earlier this month, FilmLA called for a “massive expansion” of the film and TV tax credit.
Much of the decline is due to the industry-wide contraction, which started before the 2023 strikes and has continued since then as higher interest rates and weak streaming performance forced a correction.
But industry and political leaders in LA have warned that jobs are fleeing to other jurisdictions that offer more generous film incentives. In California, film and TV productions go through a lengthy application process that examines the employment impact of each project. Those who receive a credit will receive 20% or 25% of their qualified production costs, which is limited to the bottom line production costs.
In Georgia, the credit is not capped – meaning productions are essentially guaranteed a 30% cut of their total costs, including the high salaries for actors and directors. That credit has surpassed the $1 billion mark in recent years, although Georgia also saw a sharp drop in output during the 2023 strikes.
New York increased its credit from $420 million to $700 million in 2023 to compete with neighboring New Jersey and other jurisdictions.
Nevada is also considering a plan to offer a $100 million incentive to build a soundstage facility in Las Vegas, and Arizona approved a $125 million program in 2022.
California remains the nation’s largest manufacturing center, but many have expressed concern that its market share is declining as other locations develop infrastructure and a crew base.
“California is home to the largest share of the film and TV economy in the United States,” the governor’s office said Saturday. “Film and TV production in California supports more than 700,000 jobs and nearly $70 billion in wages for workers in the state.”
Newsom agreed to a two-year increase in film credits in 2021, temporarily bringing the program to $420 million. He also signed a separate $150 million stimulus measure for sound stage construction.
In 2023, Newsom agreed to extend the program for five years, through 2030, and to make the $330 million credit “refundable.” That amendment allowed companies like Netflix, which do not have significant tax liability in California, to redeem the value of the credit for cash.
