The California Legislature has officially made Gov. Gavin Newsom‘s proposal to up the annual Film & TV Tax Credit funding to $750M annually.
Both the state Senate and the Assembly voted Friday on the trailer bill to make the legal changes needed to implement the budget they agreed upon earlier this week. Senators voted 64-1 to approve the funding, while Assemblymembers voted 31-3.
While Newsom signaled that this funding was a top priority for his office from the very beginning, its prospects became a bit unclear as the Legislature hammered out its final budget this month. After the formal vote on June 15, lawmakers still had to sort through a $12B budget shortfall that illuminated some of the warring priorities among the Legislature.
“I feel like the governor and the elected leaders heard our members and and made a commitment to our industry in California, and I think it will be repaid many times over, but it’s a hard moment to do it, and we’re deeply appreciative of it,” Entertainment Union Coalition President and Directors Guild of America Western Executive Director Rebecca Rhine told Deadline on Friday afternoon.
Rhine has been among those leading the way on this legislation, galvanizing hundreds of production workers from across the state to travel to Sacramento since the beginning of the year to help the decision makers understand the current plight of the film and television industry.
The Entertainment Union Coalition launched its Keep California Rolling campaign in February to lobby lawmakers.
One of the biggest hurdles was “shattering the myth that this is a corporate giveaway and making sure that elected leaders understand that this is a jobs bill, and it’s always been a jobs bill,” Rhine explained.
“It’s a bill that rewards productions that hire people and pay them good union wages and provide health and pension benefits. It also is an industry that has a huge number of businesses attached to it, both small and and large — hotels, coffee shops, dry cleaners, costume houses, camera houses, the list goes on and on. It drives tourism in the state. So this is not about a bailout,” Rhine continued. “This is about an industry that is additive to California, and I think that story had to be told, the story of who these workers are, what they believe in, what they bring to the state, and really a plea to recognize that if you let an iconic industry like this leave California, you will never get it back.”
Now that the additional funding has been secured, there is one step left before stakeholders are willing to claim victory. The programmatic changes to the Film & TV Tax Credit Program, which are outlined in two sister bills making their way through the Senate and the Assembly, need to officially be approved.
A vote on AB 1138 is expected next week. As of now, there’s no reason to believe the bill won’t pass. Lawmakers have been largely on board with those amendments to the program, which seek to make it easier for productions to receive funding and incentivize those productions that bring more jobs and training with them.
In addition to expanding the qualification parameters, the bills propose increasing the available credit amount for an individual project from 20% to 35% for amounts paid or incurred in Los Angeles, also giving the California Film Commission leeway to allow for additional credit percentages by 5% in other areas of economic opportunity.
The legislation comes amid the latest spurt of runaway production as other states ramp up their film and TV tax incentives programs in an effort to lure production away from California. New York last month passed a state budget that includes expanded incentives.
