Governor Gavin Newsom is making a daring proposal to significantly increase the state's film and television tax incentives in an effort to maintain California's standing as a major center of entertainment worldwide. Attracted by more generous tax benefits, television programs such as MasterChef, Supergirl, and The Kelly Clarkson Show have all moved their production to other jurisdictions. Per The Hollywood Reporter, California's yearly maximum on film and TV tax credits would be raised from $330 million to a competitive $750 million under Newsom's proposal, possibly yielding up to $3.75 billion in tax credits over a five-year period beginning in 2025. With this expansion, California's film tax credits would rank among the most generous in the country, second only to Georgia's renownedly uncapped yearly production incentives.
This plan aims to address California's recent production retention issues, particularly in light of Hollywood's tremendous rivalry from New York and Georgia. Georgia has emerged as a significant production hub, chosen for everything from Netflix originals to Disney's Marvel Cinematic Universe. Georgia's enormous U.S. studio complex was chosen by the renowned British production business Pinewood Studios, which had previously only created employment and economic gains in California.
Pressure to maintain its dominant position in entertainment production has resulted from all of this. "This means that film production can stay," stated Karen Bass, the mayor of Los Angeles, who discussed the plan's wider economic implications. "It means that all of the jobs that would be lost…would stay here."
Tens of thousands of employment in California are supported by the film and television industries, which also employ set designers, sound engineers, caterers, and performers. After several months of production pausing in 2023 due to strikes by both actors and writers, this plan follows a particularly difficult time for entertainment professionals. Consequently, there was a sharp decline in employment prospects in California's entertainment industry, especially in Los Angeles, with workers reportedly selling their homes, turning to food banks, and in certain situations quitting the business completely.
The California Film Commission's director, Colleen Bell, who is in charge of the state's production incentives, discussed the significance of retaining these employment in California. Bell admitted that other changes to the existing system may be made, such as limiting the amount of tax relief that a single production is allowed to get and defining what constitutes allowable costs. "We have to invest in our lead and preserve jobs for Californians so they can do the jobs they love and put paychecks in their pockets," Bell said. It is anticipated that the extension, which is still pending discussion, will also strengthen economic knock-on effects that assist nearby companies, such as caterers, costume suppliers, and equipment rental services.
Part of the state's plan to maintain employment in California is Mayor Bass's task team, which aims to encourage local entertainment work. This team is investigating more strategies to maintain a thriving local business in the face of entertainment cost reductions across the country as part of the program.
However, Newsom's expansion plan isn't without challenges. As some states, including New York , recently opted to increase their own credits - with additional provisions within New York City - California is under pressure to do more to maintain its allure. Yet, with more resources directed toward in-state production, the proposed program could help ensure that Hollywood remains in California rather than heading to new markets that promise enticing tax cuts.
If approved, Newsom's plan would mark a turning point for California's entertainment sector and might undo years of out-of-control production that forced profitable employment out of the state. In a state that has largely based its identity on Hollywood's cultural and creative heritage, it may mark the beginning of a fresh dedication to localizing the economic advantages of entertainment—a new Golden Era, if you will.
