In an attempt to raise the rate of entertainment production in California — and the Los Angeles area in particular — Gov. Gavin Newsom unveiled a proposed expansion of the tax credit for the industry.
The expansion of the program, which started in 2009 and intended to incentivize the production of films and television shows in California, would more than double the credit from $330 million to $750 million. The program could go into effect as early as June 2025, pending approval from the state Legislature.
“This is about investing in the future of this industry,” Newsom said in a news conference on Sunday.
Production has slowed in California in recent years, in part due to the 2020 COVID-19 pandemic and the actor and writer strikes. Many studios and filmmakers have opted to work in states like New York and Georgia instead of the “Entertainment Capital of the World” as of late.
Georgia, notably, doesn’t have a cap on the tax credit.
“California is the entertainment capital of the world, rooted in decades of creativity, innovation, and unparalleled talent,” said Newsom 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.”
According to a study from FilmLA earlier this month, production dropped by 5% in the third quarter of 2024 compared to the same timeframe of 2023. Newsom called the noticeable drop in production a “legitimate crisis.”
Joining Newsom at the news conference in Hollywood’s Raleigh Studios was Los Angeles Mayor Karen Bass, who echoed the governor’s thoughts that this is a problem that needs to be solved.
“Hollywood is the cornerstone of this city and our economy and our message to the industry today is clear – we have your back,” said Mayor Bass. “When I was Speaker of the California State Assembly, I worked to support leaders like now-Councilman Paul Krekorian to create the film tax credit. Despite the economy being in a difficult spot, we knew that the industry needed support, and if we could at least start the program, then we could grow it. Today I’m proud to stand with Governor Newsom and industry leaders to continue this important work supporting this legacy industry.”
