In a move to reinforce California’s prominence as a global entertainment capital, Governor Gavin Newsom has introduced a proposal to significantly expand the state’s film and television tax incentives. Shows such as MasterChef, Supergirl, and The Kelly Clarkson Show have previously relocated to other states offering more attractive tax benefits. Newsom’s proposal seeks to increase California’s annual film and TV tax credit cap from $330 million to $750 million, potentially granting up to $3.75 billion in tax credits over a five-year period starting in 2025. This adjustment would position California’s film tax credits among the highest in the United States, following closely behind Georgia, which has no annual cap on production credits.
The Growing Competition and California’s Response
The proposal emerges as California faces increasing competition to retain film and television productions. States like Georgia and New York have become popular alternatives for productions due to their generous tax incentives. Georgia, in particular, has drawn major projects, including productions from Disney’s Marvel Cinematic Universe and Netflix originals. Iconic British production company Pinewood Studios also selected Georgia as the location for its massive U.S. studio complex, creating thousands of jobs and economic benefits previously concentrated in California.
This competitive landscape has driven California to take action to maintain its top position in the entertainment industry. Los Angeles Mayor Karen Bass expressed support for Newsom’s proposal, emphasizing the broader economic impact. “This means that film production can stay,” Bass stated. “It means that all of the jobs that would be lost… would stay here.” This retention of jobs spans a wide range of roles, from actors and set designers to sound engineers and caterers, reinforcing the diverse workforce supported by California’s entertainment industry.
The Employment Impact of Retaining Film and TV Production
California’s film and TV sectors contribute to tens of thousands of jobs statewide. However, recent challenges have left the industry facing workforce reductions. The writers’ and actors’ strikes in 2023, which lasted several months, disrupted production schedules, causing a decline in job opportunities across Los Angeles and beyond. Reports surfaced of entertainment workers selling their homes, relying on food banks, and even considering new career paths due to limited job openings.
Colleen Bell, director of the California Film Commission, highlighted the importance of keeping these jobs within the state. She acknowledged that the current incentive system may undergo additional adjustments to optimize its impact, such as setting limits on the tax relief a single production can claim or refining eligible expenses for tax credit purposes. “We have to invest in our lead and preserve jobs for Californians so they can do the jobs they love and put paychecks in their pockets,” Bell stated. This expansion could amplify the economic ripple effects that support local businesses involved in entertainment production, including catering companies, costume suppliers, and equipment rental services.
Strengthening Local Efforts: Mayor Bass’s Task Force
As part of the state’s broader strategy to retain jobs, Mayor Bass has established a task force dedicated to promoting local entertainment work. This team is actively exploring ways to sustain a thriving entertainment industry in California amid rising national cost-cutting measures. In a challenging market, this task force aims to help California remain a primary destination for entertainment productions, ensuring that the state’s economy continues to benefit from the industry’s contributions.
Facing the Challenges Ahead
Though Newsom’s expansion plan could offer substantial advantages for California’s entertainment sector, challenges persist. Competing states, including New York, have recently increased their own production credits, with added benefits for productions in New York City. This competition places California under pressure to implement additional incentives to keep its entertainment sector attractive. By committing more resources to in-state production, Newsom’s proposed program aims to help California retain its Hollywood legacy, even as other markets offer enticing tax breaks.
If approved, this plan could mark a significant shift in California’s approach to film and TV production, reversing years of “runaway production” that have cost the state lucrative job opportunities. The expansion reflects a renewed dedication to localizing the economic benefits of entertainment in California—a state that has historically built its identity around Hollywood’s cultural and creative influence.
Potential Economic Impact and a Path Toward a New Era
The proposal presents an opportunity for California to reestablish itself as the go-to destination for production companies. If the expanded incentives successfully bring more productions back to the state, California could enter a new “Golden Era” of Hollywood, where local businesses, workers, and the broader economy benefit from sustained growth in entertainment. By supporting these productions, California’s government reinforces a tradition that has shaped the state’s identity for decades and could continue to do so for years to come.
Ultimately, the expanded tax incentives proposed by Governor Newsom signal a bold step toward preserving California’s entertainment legacy. The film and TV industry has been integral to the state’s cultural and economic fabric, and this expansion could empower California to reclaim its standing as the world’s leading entertainment hub.
