HOLLYWOOD — Gov. Gavin Newsom was on location in Hollywood Sunday, where he unveiled a proposal to more than double the tax credit the state offers to producers of films and TV shows that shoot in California.
Appearing with industry union leaders, Los Angeles Mayor Karen Bass and state Sen. Anthony Portantino, D-Burbank, Newsom announced a plan to boost the annual tax credit from its current $330 million to $750 million, which would represent the largest amount offered by any state except Georgia, which has no cap on its credits.
The plan, which still needs approval by the state Legislature, could take effect as early as July 2025.
The Los Angeles area, long considered the center of film and TV production in the United States, has struggled to retain its hold in recent years, losing business to Canada and other states that offer more attractive incentives, most prominently New York and Georgia.
“We wanted to reconcile the stress that’s been building up here for, frankly, the better part of a decade,” Newsom said, referring to the competition from other places, the coronavirus pandemic and the crippling writers and actors strikes of 2023.
“I don’t know how they can continue to afford that program (in New York), and we’ll see” how it goes in Georgia, he added.
In a statement released earlier Sunday, Newsom called California “the entertainment capital of the world, rooted in decades of creativity, innovation, and unparalleled talent. 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.”
Bass, who worked on California’s original film tax credit policy in 2009 when she was speaker of the state Assembly, said, “We have to do everything we can to strengthen and protect one of the foundational blocks of our economy in Los Angeles.”
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Bass also noted that losing production not only harms the local entertainment industry, but can jeopardize jobs in other support industries such as restaurants, construction businesses and flower shops.
The mayor closed her remarks Sunday with a lighthearted dig at the Big Apple.
“Just like we’re going to do in the World Series, we have to make sure that we stay ahead of New York,” she said.
In a statement released after Sunday’s event, Portantino said he was “thrilled” by the governor’s budget announcement.
“Film and television production is a significant part of California’s history and economic vitality. Many skilled and talented workers are out of employment and worry about providing for their families. Production has not rebounded since the pandemic and post-strike settlements. It’s imperative that California does more to compete with other states and countries that have been luring production away from us,” he said.
In its most recent report released on Oct. 16, FilmLA noted that overall shooting in the Los Angeles area decreased by 5% in the third quarter of 2024, representing the weakest quarter of the year.
According to FilmLA, the film office for the city and county of Los Angeles as well as other local jurisdictions, the five-year average for local feature film production showed a decline of 48%.
“Only a few months ago, the industry hoped we’d see an overall on-paper gain in the third quarter, due to the strike effect,” Paul Audley, FilmLA president, said after the report was released. “Instead, we saw a pullback and loss of forward momentum, heading into the fall season that will make or break the year.”
Los Angeles City Councilman Paul Krekorian praised the proposal on Sunday.
“Families throughout the Los Angeles region depend directly and indirectly on film and television production for their livelihoods,” said Krekorian, whose San Fernando Valley district includes major studios and production facilities. “I congratulate the governor for his bold move to strengthen this vital industry. I’m proud of the role Mayor Bass and I played in creating California’s original production tax incentive and I’m thrilled it’s being expanded now.”