On Sunday, Gov. Gavin Newsom announced a proposal that would double California’s Film and Television Tax Credit Program amid concerns over productions leaving Hollywood to film in other states.
Newsom’s proposal would expand the program’s tax credit to $750 million annually from its current $330 million. The governor said the expansion would encourage productions to film in California, with the new increase going into effect on July 1, 2025.
“This is about investing in the future of this industry, the future of this state, and the values we hold dear,” Newsom said at a press event in Hollywood. “[We are] investing in our creativity, this great cultural export.”
In 2023, California’s film and television production declined by 45 projects, a study conducted by FilmLA found. This budget increase for the Film and Television Tax Credit Program aims to help.
The program, which began in 2009, is now on its fourth iteration. This will be the first time since the program’s inception that credits will be refundable, further encouraging filming to take place in California. According to a 2022 report by the Los Angeles Economic Development Corporation, the program has created 110,000 jobs and contributed nearly $21.9 billion in economic output over five years.
In 2024, projects from HBO, 20th Century Studios and Amazon have utilized funding from the program to film in Los Angeles, according to the governor’s website. Amazon’s “Fallout” relocated to Los Angeles from its original filming location in New York in 2022, incentivized by the tax credits. In September alone, the program supported 19 projects, creating over 3,800 new jobs, Newsom’s website reports.
Currently the program is not able to accommodate all of the productions applying for tax credits. An estimated 71% of rejected productions subsequently film out-of-state, according to the governor’s website.
“All these little things have culminated into why so many productions are leaving California, but I really do feel like the crux of it is financial reasons,” said Katie Youn, a sophomore majoring in cinematic arts, film and television production. “I think this is obviously the best place to shoot films because of the history that Los Angeles has with film production.”
Youn said that the recent trend of productions leaving California has concerned her as a student filmmaker. This year, the university’s School of Cinematic Arts was ranked as the number one film school in the country by the Hollywood Reporter. The entertainment industry’s shift to other states that offer stronger financial incentives, such as Texas, Louisiana and New York, could impact access to opportunities for students and alums.
“If it’s not L.A., it’s Texas or Georgia or Canada, and those are all places that I would not want to live in,” said Youn, who is originally from Pennsylvania. “I came all the way out here to go to film school and to build my career. Now my career is leaving me.”
According to the FilmLA study, 27% of the US’s domestic film industry workforce resides in Los Angeles and the surrounding area. USC curriculum addresses the importance of subsidies like this for workers in the industry.
“We had to pitch projects from the ground up, the majority of my curriculum was creating budgets, which rely on subsidies,” said Quinn Soltesz, who graduated from the business of cinematic arts program at USC earlier this year. “Expanding this program is essential if they want the film industry to remain based in Southern California … they taught us to base our creative choices off of being able to film in these locations.”
However, the proposal would add to California’s mounting budget deficit issues. According to California’s Legislative Analyst’s Office, the state is facing a $68 billion deficit caused by a significant revenue decline in 2022‑23. However, the governor’s office has stated that every tax credit dollar approved by the program generates at least $24.40 in output.
Under Newsom’s proposal, California would offer more money to film productions than any state besides Georgia, which has no cap on tax credits. During the press conference, Mayor Karen Bass emphasized the importance of keeping Los Angeles’ film industry competitive with New York and Georgia.
“This industry touches so many people in so many different ways,” Bass said. “We watched the industry go through tough times during the pandemic. We watched tough times through the strikes. We were hoping everything would go right back to normal, but that is not what has happened.”
Newsom’s goal to bring film back to Hollywood still requires legislative approval. If passed, the program could see the effects of the raise as soon as July.