California Governor Gavin Newsom is proposing an expansion of the state’s film and television tax credit program from $750 million to at least $1 billion per year. The plan comes as California struggles to retain production activity and entertainment-industry jobs despite recent increases to its incentives.
A FilmLA report cited in the proposal found that production levels in California fell 3.7 percent during the third quarter. The decline is particularly significant for a state where many major studios and streaming companies are headquartered in Los Angeles.
California’s current incentive was increased last year from $330 million to $750 million annually. Although applications initially rose after that expansion, production activity later began to fall again. The state is competing with incentive programs in New Jersey, New York and Georgia, as well as international production centers including the United Kingdom and Hungary.
Under Newsom’s proposal, the program would add credits for above-the-line talent and offer benefits to companies that commit to making more than one production in California. The incentives would also be extended through 2040, compared with the current end date of 2030, giving companies a longer period of certainty.
The plan would increase annual funding for independent films to $100 million, or $26 million more than under the current program. Newsom said the expansion is intended to drive additional investment into California and preserve the state’s position in the entertainment industry.
The governor is also calling on Congress to approve a federal film and television incentive. He argued that states cannot bear the full cost of competing for productions on their own and said national legislation could complement state-level programs.
Sources: IndieWire.