Gov. Gavin Newsom announced last week a proposal to expand the state’s film and TV production tax credit program. If approved by the General Assembly, the tax credit program would increase from $330 million a year to $750 million a year.
The massive increase to the program, which is administered by the California Film Commission, would allow California to outpace other states offering tax credits, luring more entertainment industry projects back to the Golden State, the commission said.
“California is the entertainment capital of the world, rooted in decades of creativity, innovation and unparalleled talent,” Newsom said in a statement. “Expanding this program will help keep production here at home, generate thousands of good paying jobs, and strengthen the vital link between our communities and the state’s iconic film and TV industry.”
Commission Director Colleen Bell said that California needs to keep pace with competing states and nations in providing aggressive tax incentives.
“The Governor’s bold plan will accelerate these efforts and assure California remains the production center of the entertainment industry,” Bell said in a statement.
Los Angeles Mayor Karen Bass, who joined Newsom for the announcement on Oct. 27 at Hackman Capital Partners’ Raleigh Studios in Hollywood, called the neighborhood “the cornerstone” of the city and its economy and “the message to the industry is clear – we have your back.”
Since its start in 2009, California’s Film & Television Tax Credit Program has generated over $26 billion in economic activity and supported more than 197,000 cast and crew jobs across the state, the commission’s release said.
According to Bell, the program has been oversubscribed year after year, with more productions applying than can be accommodated under the current budget cap. In recent years, projects unable to secure California’s tax credits moved to other locations. That migration caused significant economic losses, with an estimated 71% of rejected projects subsequently filming out-of-state.
Many other projects chose not to apply due to the limited funding, suggesting that total runaway production losses are likely much higher, the release stated. Between 2020 and 2024, data shows California lost an estimated $1.6 billion in production spending due to limited tax credit funding, directly impacting state jobs and local economies.
In 2023, Newsom signed a five-year extension of the program, including new workforce diversity provisions, more funding for the Pilot Career Pathways training program, and the nation’s first Safety on Production Pilot Program, which involves a firearms training requirement and the inclusion of a specialized advisor to monitor on-set safety.
These new requirements are the result of the shooting death of cinematographer Halyna Hutchins in October 2021 on the New Mexico set of the movie, “Rust.” Hutchins died after being shot and killed by a bullet from a prop gun discharged by actor Alec Baldwin that was not properly checked.
Tax credits will become refundable for the first time beginning with the 2025-26 fiscal year.
