The California State Legislature has acknowledged that money alone may not be enough to entice production back to the state, introducing a pair of bills Wednesday aimed at bolstering Gov. Gavin Newsom’s plan to expand the state’s Film and Television Tax Credit Program.
The bills, sponsored by Senator Ben Allen and Assemblymembers Rick Chavez Zbur and Isaac Bryan, are meant to “amend, update, and modernize” the current program beyond Newsom’s commitment to increase the tax credits from their present level of $330 million a year to around $750 million annually.
“Something like 77% of the projects that are unable to secure a tax credit here in the state end up going elsewhere,” Allen said during a press conference at SAG-AFTRA on Wednesday. They wanted to do the work here, and nearly all of them, when they don’t get the credit, end up leaving. This has led to a loss of nearly $1B dollars in production spending, which equates to lost jobs, lost economic gains…It’s such a lost opportunity, given all that we know that we have here and the fact that we should be doing the work here.”
The exact plans for how, exactly, to reshape California’s Film and Television Tax Credit Program weren’t unveiled Wednesday, but Chavez Zbur gave some guidance on what the legislature hopes to accomplish with these bills.
“I can tell you that the effective rate of the programs will increase to a formula that is competitive with those states and countries who are luring our jobs away,” he said. “I can tell you that we will be expanding the kinds of productions that qualify for the program, again, focusing on those productions which we are losing and that provide the best jobs.”
Newsom’s proposed expansion of the tax credit is not yet set in stone, given California’s 2025-26 budget is still being negotiated, though it still seems very likely to be approved.
Allen assured Wednesday that the plan remains at the forefront of the governor’s mind, despite the other issues weighing on Los Angeles at the moment, including relief and recovery from January’s historic wildfires.
“All of those are massive headwinds, but it actually underscores why we need to do this so much because of all the economic implications at play here,” he told reporters, arguing that the tax credit “generates economic activity” that will greatly benefit the state.
California has suffered from plummeting production, particularly in Los Angeles, over the last several decades has other territories have begun offering more financial incentives for film and TV production. New Jersey, Nevada, and Utah have been putting more tax credit money on the table, and New York nearly doubled its own tax credit to $700M last year. Jurisdictions like Georgia, Ontario and the UK do not have caps on their subsidies.
The last few years have been especially trying, given a global production contraction that has only exacerbated the problems at the local level. According to a recent report from FilmLA, production in Los Angeles was down more than 30% over five-year averages in 2024.
