OAN Staff James Meyers
1:48 PM – Monday, October 28, 2024
Democrat California Governor Gavin Newsom announced a proposal to expand the state’s tax incentives for film and television productions, urging them to shoot in Hollywood and other California cities.
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Since the turn of the century, other states and foreign countries have offered financial incentives, including tax breaks, for projects to film at their location. This has reportedly prompted an exodus of productions to leave California, even though most Americans label Hollywood as the TV and film entertainment capital.
Meanwhile, states such as Georgia, New York, Louisiana, and other countries such as the United Kingdom, Australia, Canada, Thailand, and Croatia have been able to attract major projects since changing their TV and film incentives.
While a majority of Hollywood movies continue to struggle at the box office, at least in comparison to the past when more consumers were buying tickets, studios look to save money in any way they can.
In response, to attract productions back to Hollywood, Newsom announced an expansion of the state’s Film and Television Tax Credit Program to $750 million annually, up from the current $330 million.
“California is 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,” Newsom said in a statement.
According to recent data from Newsom’s office, close to 71% of productions that were not able to get a tax credit in California ended up moving to another state to complete the project, resulting in “significant economic losses” for California.
“We wanted to reconcile the stress that’s been building up here for, frankly, the better part of a decade,” Newsom said at a press conference on Sunday alongside Los Angeles Mayor Karen Bass (D-Calif.).
Additionally, California’s tax credit program has generated $26 billion in the state’s economy and supported over 197,000 cast and crew jobs since it was introduced 15 years ago.
“Hollywood is the cornerstone of this city and our economy and our message to the industry today is clear – we have your back,” Bass said in a statement.
However, the California legislature must first approve the tax credit expansion, which would come into effect July 1st, 2025.
The industry has also not completely recovered from the 2023 writer strikes, as production has plummeted below pre-strike levels in recent months, according to data from FilmLA.
Newsom temporarily increased the incentive by $90 million when the state experienced a “pandemic-era surplus” in 2021. The state also created a separate pool of $150 million to incentivize the construction of new soundstages.
During his speech, Newsom acknowledged that the competition to attract film production is global.
“That’s where the federal government can also play a role,” he said, and then alluded to Kamala Harris. “And I’ll just tip a hat to an Angeleno who might be the next president of the United States. She may have a thing or two to say about that. Stay tuned.”
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