Gov. Gavin Newsom’s office said in a statement that he is scheduled to announce a proposal on Sunday to support California’s struggling television and film industry.
Newsom is scheduled to appear in a studio in Los Angeles to make the announcement, alongside entertainment industry leaders and labor unions. California offers $330 million in tax breaks annually to the industry, but these incentives lag behind Georgia, New York and countries like the United Kingdom and Canada.
The governor is expected to propose enhancing the tax break, which will go through the Legislature’s budget process next year.
Filming in Los Angeles has declined significantly in recent years, according to release data from FilmLA. Total shooting days in the third quarter of 2024 were 50% lower than the same quarter in 2021, and 36% lower than the five-year average.
Scripted production nearly came to a halt during the actors’ and writers’ strike last year. But the post-strike recovery has stalled and production levels have fallen steadily since the start of 2024. Earlier this month, FilmLA called for a “significant expansion” of film and TV tax relief.
Much of the decline is due to the industry-wide contraction, which began before the strikes in 2023 and has continued since then, as rising interest rates and weak flow outcomes have prompted a correction.
But industry and political leaders in Los Angeles have warned that jobs are fleeing to other jurisdictions that offer more generous filming incentives. In California, film and television productions go through a lengthy application process that considers the career impact of each project. Those who receive the credit receive 20% or 25% of their eligible production expenses, which is limited to “below the line” production costs within the state.
In Georgia, there is no maximum credit — meaning productions are essentially guaranteed to get a 30% discount on their total costs, including the salaries of expensive actors and directors. This credit has exceeded $1 billion in recent years, although Georgia also saw a sharp decline in production amid strikes in 2023.
New York increased its credit from $420 million to $700 million in 2023 to compete with neighboring New Jersey and other jurisdictions.
Nevada is also considering a plan to offer a $100 million incentive to build a sound facility in Las Vegas, and Arizona has approved a $125 million program in 2022.
California remains the nation’s largest production hub, but many have expressed concerns that its market share will decline as other infrastructure and crew base locations are developed.
“California is home to the largest share of the film and television economy in the United States,” the governor’s office said Saturday. “Film and television production in California supports more than 700,000 jobs and nearly $70 billion in wages for in-state workers.”
Newsom approved a two-year film credit increase in 2021, temporarily bringing the program to $420 million. He also signed a separate $150 million incentive bill to build audio platforms.
In 2023, Newsom agreed to extend the program for five years, through 2030, and made the $330 million credit “refundable.” This amendment allowed companies like Netflix, which do not have significant tax liabilities in California, to redeem the credit for cash.