Newsom Proposes Boosting California Film and TV Tax Credit to $1 Billion
California Gov. Gavin Newsom is pushing to raise the state's film and TV tax credit to at least $1 billion a year, his latest effort to stop Hollywood productions from leaving the state.
The proposal, announced Monday, would boost the program from its current $750 million annual cap and extend it through 2040. It still needs approval from the state Legislature before it can take effect.
What Newsom Is Proposing
Beyond raising the overall amount, the plan would expand the credit to cover above-the-line talent, such as writers, directors, producers and lead actors, according to TheWrap.
It would also set aside $100 million a year for independent productions and give a 5% credit boost to companies that commit to more than one production in California. The program is currently set to run through 2030.
"California created the modern entertainment industry; we're the capital of entertainment and we're going to keep it here," Newsom said in a statement.
Newsom also called on Congress to pass the Motion Picture, Television and Entertainment Revitalization Act by the end of the year. The federal bill would create a 20% base credit for qualifying U.S. productions. "States can't shoulder the cost alone," he said.
Production Is Still Slipping
The push comes just a year after Newsom more than doubled the program, raising it from $330 million to $750 million a year.
Newsom's office says that expansion has paid off, generating $8.25 billion in direct production spending, including $3.2 billion in wages, and creating more than 43,000 cast and crew jobs. The state says film shoot days are up 52% and TV shoot days are up more than 7%.
Still, the numbers have not fully turned around. A FilmLA report released last month found that local production fell 3.7% in the third quarter, even after the bigger credit took effect, Arts & Voices reported.
California continues to face stiff competition from states like New York, New Jersey and Georgia, as well as countries such as the United Kingdom and Hungary, which offer their own generous incentives to lure productions.
Supporters and Skeptics
Supporters say the credits keep jobs in California, especially for below-the-line workers like camera operators, grips, set builders and technicians, many of whom have watched work move out of state. According to the governor's office, every $1 in credits has generated $24.40 in economic output, $16.14 in GDP and $8.60 in wages since the program launched in 2009. The state says the program has generated more than $35.4 billion in economic activity overall and supported more than 248,000 cast and crew jobs, according to TheWrap.
Critics of film tax credits have long argued that the programs hand public money to wealthy studios and that their broader economic benefits are often overstated. Those concerns could surface again as lawmakers weigh adding hundreds of millions more to the program.
A Plan for the Next Governor
The announcement came on the eve of Tuesday's midterm elections, when Californians will choose Newsom's successor. Newsom, who is termed out, leaves office on Jan. 4, 2027, meaning the next governor would carry out the plan if it passes.
Democratic nominee Xavier Becerra has promised to strengthen the credit but has not said how, according to Globe TV. Republican Steve Hilton has pledged a 40% credit with no cap.
The proposal caps a busy final stretch for Newsom, who also plans to deploy election lawyers to monitor key California House races this week.
Whether lawmakers sign off on the bigger credit, and whether it can finally reverse Hollywood's production slump, could become one of the first big tests for California's next governor.
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