Newsom Seeks at Least $1 Billion for California Film Tax Credits
The proposal would let qualifying productions claim credits for above-the-line costs, including actors’ compensation, subject to funding caps. It would also set aside $100 million annually for independent films, offer a 5% credit boost to companies producing at least two qualifying projects in California, and extend the program through 2040.
Newsom said the expansion is intended to keep production investment and jobs in California. He also urged Congress to pass the bipartisan Motion Picture, Television, and Entertainment Revitalization Act, which would create a 20% federal tax credit for qualifying U.S. film, television and visual effects projects.
The state raised its annual program funding from $330 million to $750 million last year, yet production in the Los Angeles area has continued to decline. FilmLA data cited in coverage showed on-location shoot days from July through September were nearly 5% lower than a year earlier and 29% below the five-year average. Newsom’s office says projects benefiting from the current program have been linked to over $8 billion in production expenditures and upwards of 43,000 cast and crew jobs.
Some industry advocates welcomed the proposed changes, while others said incentives alone would not resolve permitting and operational hurdles or the limits created by the program’s funding cap. The proposal would need legislative approval. Newsom is due to leave office in January 2027, and the plan would extend benefits well beyond his term.
Newsom’s Film Credit Plan Aims to Keep California Jobs at Home
California’s entertainment workforce needs more than promises as production continues to slide. Newsom’s proposal would raise annual film and TV credits from $750 million to at least $1 billion, extend the program through 2040 and make actors’ compensation eligible, subject to caps.
The plan also reserves $100 million a year for independent films and offers a 5% credit increase to companies that commit to at least two qualifying California productions. Those provisions could spread support beyond major studios and encourage companies to make sustained investments in the state.
The urgency is clear in the numbers: on-location shoot days in the Los Angeles region from July through September were nearly 5% below the same period last year and 29% under the five-year average. Newsom’s office says the existing credit has supported more than 43,000 cast and crew jobs and generated over $8 billion in direct production spending.
Credits cannot fix every obstacle. Industry advocates say permitting and operational problems still make filming locally difficult, and some argue the program’s cap creates hurdles. But letting production and its work leave California is no solution. Newsom is also pressing Congress to pass a federal 20% credit for qualifying U.S. projects. His state proposal still needs legislative approval, and the next governor would inherit its long-term commitments.
Newsom Wants Taxpayers to Put at Least $1 Billion Behind Hollywood
Newsom’s latest plan asks California to commit at least $1 billion a year in tax credits to an industry that has continued losing production despite last year’s expansion from $330 million to $750 million. The proposal would extend the program through 2040 and cover above-the-line costs, including actors’ compensation, subject to caps.
It would also reserve $100 million annually for independent films and award a 5% boost to companies that make at least two qualifying productions in California. These are substantial public incentives, but the state’s own production figures show that a larger credit is not, by itself, a guarantee that filming will return.
On-location shoot days in the Los Angeles region from July through September were nearly 5% below the same period a year earlier and 29% below the five-year average. Newsom’s office cites over $8 billion in production outlays and more than 43,000 cast and crew jobs associated with the current program. Those figures deserve scrutiny alongside the continuing decline, not as a reason to assume another expansion will succeed.
Industry advocates have also identified permitting and operational barriers, while some say the funding cap makes the credit harder to use. A tax break cannot substitute for addressing those problems. Newsom is urging Congress to create a separate 20% federal credit, too. The state proposal requires legislative approval and would carry on through 2040, long after Newsom leaves office.
Reported by Variety, Deadline, The Hollywood Reporter, Los Angeles Times, New York Post, The Washington Examiner.
