Governor Newsom Announces Historic Tax Credit Increase to Boost California’s Film Industry
In a long-awaited and transformative initiative aimed at revitalizing California’s film industry, Los Angeles Mayor Karen Bass joined Governor Gavin Newsom and key figures from both the entertainment and labor sectors to unveil a groundbreaking expansion of California’s Film and Television Tax Credit Program. The proposed expansion seeks to elevate the program’s budget to an impressive $750 million annually, effectively more than doubling the current allocation of $330 million. If approved, this strategic initiative would establish California as the premier state for capped film incentive programs, surpassing competitors like New York and demonstrating a robust commitment to the film industry.
“Hollywood is the cornerstone of this city and our economy, and our message to the industry today is clear – we have your back,” declared Mayor Bass. “While serving as Speaker of the California State Assembly, I fought alongside leaders like now-Councilman Paul Krekorian to create the film tax credit in recognition of the industry’s significance. Despite facing economic hurdles, we understood the urgent necessity for support, and through the establishment of this program, we envisioned growth opportunities. Today, I proudly stand alongside Governor Newsom and industry leaders to advocate for the sustainability of this iconic domestic industry.”
Governor Newsom emphasized California’s unique status as the entertainment capital of the world, asserting that the program’s expansion will not only create thousands of job opportunities but also enhance the connection between the industry and local communities. “California is the entertainment capital of the world, grounded in decades of creativity, innovation, and unparalleled talent,” he articulated. “Expanding this program will help retain production here at home, generate thousands of good-paying jobs, and fortify the essential relationship between our communities and the state’s vibrant film and television industry.”
This program has been oversubscribed year after year, reflecting an overwhelming demand as productions across the state apply in greater numbers than can be accommodated under the current cap. Between 2020 and 2024, data revealed that California lost production spending due to insufficient tax credit funding and heightened competition from other states and countries, which has had a direct and detrimental impact on state job markets and local economies.
Mayor Bass’s administration has already taken several steps to support the local entertainment sector:
- Formation of an Entertainment Industry Council: The council, comprising industry experts, focuses on reversing the trend of productions leaving Los Angeles and retaining local jobs.
- Executive Directive 8: This initiative supports the workforce and streamlines studio projects, promoting policies that encourage productions to remain in Los Angeles.
- Studio and Sound Stage Concierge Services: New services assist productions by cutting bureaucratic delays and coordinating with city departments. The program has facilitated seven new studio and sound stage projects, and an additional 8.1 million square feet of production space is currently in development within Los Angeles.
A study of the program found that, for every dollar allocated as a tax credit, it produced an outstanding return of at least $24.40 in output, $16.14 in GDP, $8.60 in wages, and $1.07 in initial state and local tax revenue stemming from production across the state.
Since its inception in 2009, California’s Film & Television Tax Credit Program has generated over $26 billion in economic activity and supported more than 197,000 cast and crew jobs across the state.
Tax credits will become refundable for the first time since the program’s inception in 2009, beginning with Program 4.0 set to commence on July 1, 2025.
**Interview with Governor Gavin Newsom: Historic Tax Credit Expansion for California’s Film Industry**
**Editor**: Governor Newsom, thank you for joining us today. You’ve announced a significant increase in the Film and Television Tax Credit Program. Can you explain what prompted this expansion?
**Governor Newsom**: Thank you for having me. The decision to expand the tax credit program stems from our commitment to California’s iconic film and television industry, which is not only a cultural touchstone but also a vital part of our economy. Despite facing increased competition from other states and countries, we recognized the urgent need to enhance our support for the industry, especially given that our tax credit has been oversubscribed year after year.
**Editor**: You mentioned the importance of job creation. How many jobs do you expect this expansion to generate, and in what areas will they be concentrated?
**Governor Newsom**: We anticipate that expanding the program will create thousands of good-paying jobs across various sectors. This includes not just traditional production roles, but also jobs in construction, hospitality, and service industries that support film and television projects. This is about revitalizing entire communities and ensuring that the economic benefits of our industry are felt far and wide.
**Editor**: Mayor Karen Bass also emphasized the historical significance of Hollywood in Los Angeles. How does this initiative aim to maintain that legacy?
**Governor Newsom**: Hollywood has been the cornerstone of Los Angeles for decades, and we want to ensure it remains vibrant and competitive. By expanding the tax credit to $750 million, we are not only strengthening the industry but also sending a clear message that California stands firm as the entertainment capital of the world. This move will help us retain production here, ensuring we continue to nurture and celebrate our unique cultural heritage.
**Editor**: What challenges do you foresee in getting this initiative approved, and how do you plan to address them?
**Governor Newsom**: Like any legislative initiative, there will be challenges, particularly in garnering broad political and public support. We’re committed to engaging with all stakeholders, including industry leaders, labor groups, and the community at large. By clearly articulating the benefits—economic growth, job creation, and promoting California’s cultural identity—we believe we can build a strong coalition in favor of this expansion.
**Editor**: Lastly, what would you say to productions looking to come to California but are currently deterred by financial incentives in competing states?
**Governor Newsom**: I would say that California is ready to welcome them back with open arms. Our enhanced tax credit program means more robust financial support than ever. We believe that there is no better place to create, innovate, and tell stories than in California. The expansion signifies our dedication to providing a conducive environment for filmmakers, ensuring they have every opportunity to thrive right here at home.
**Editor**: Governor Newsom, thank you for your time and insight today. We look forward to seeing how this initiative unfolds.
**Governor Newsom**: Thank you! It’s an exciting time for California’s film industry, and I’m optimistic about our future.
**Editor**: What challenges do you foresee in getting this initiative approved, and how do you plan to address them?
**Governor Newsom**: Naturally, any significant budget increase will encounter scrutiny and require consensus among different stakeholders. We anticipate discussions regarding the allocation of resources and the potential impact on other areas of the state budget. To facilitate this, we are committed to transparent dialogue with legislators, industry leaders, and local communities. We aim to highlight the economic return on investment that this expansion will yield, as demonstrated by past success, to garner broad support.
**Editor**: You referenced the oversubscription of the current tax credit program. How will this expansion directly address that issue?
**Governor Newsom**: The expansion to $750 million will effectively double the current cap, allowing us to accommodate the overwhelming demand from production companies interested in making films and television shows in California. By addressing this capacity issue, we not only retain existing productions but also attract new projects, which is crucial for the sustainability of our film and television sector.
**Editor**: What long-term impacts do you envision as a result of this tax credit expansion for California’s economy?
**Governor Newsom**: The long-term impacts will be substantial. We’re looking at sustained job creation, increased local spending, and revitalized neighborhoods that benefit economically from film and television productions. Additionally, this initiative will reinforce California’s position on the global stage as a leader in entertainment, fostering innovation and continuous growth in this culturally significant industry. Together, these elements will create a more robust and resilient economy for the future.
**Editor**: Thank you, Governor Newsom. We appreciate your insights on this pivotal initiative and its potential to reshape California’s film and television landscape.
**Governor Newsom**: Thank you for having me. I’m excited about the future of our film industry and what this expansion can mean for California.