California Gov. Gavin Newsom announced a proposal to expand the state’s annual film and television tax credit program to at least $1 billion in an effort to retain entertainment industry employment within the state. The legislative initiative seeks to build upon previous expansions to combat growing global competition and prevent production companies from relocating projects to rival jurisdictions.
Highlighting the economic and cultural stakes of the initiative, Newsom stated, “California created the modern entertainment industry; we’re the capital of entertainment and we’re going to keep it here.” He added, “Through this expansion, we will maintain the momentum and success of our historic expansion last year. But states can’t shoulder the cost alone, which is why I am calling on Congress to back up an expanded tax credit by passing national film and TV tax credit legislation already on the table.”
Under the newly proposed framework, the state’s tax incentive cap would increase from its current $750 million threshold and extend the overarching program through 2040. The program updates feature dedicated allocations, including $100 million targeted specifically toward independent film projects, alongside incentives aimed at retaining above-the-line talent and rewarding multi-production commitments from major studios.
Newsom’s proposal comes amidst persistent challenges for local production volume. While previous legislative increases yielded significant initial direct spending and job creation, regional reporting organizations like FilmLA noted a 4.8% year-over-year decline in local shooting days during the third quarter, highlighting the ongoing pressure on California’s creative economy.
In addition to state-level relief, Newsom emphasized the need for broader legislative measures to protect domestic entertainment infrastructure. He reaffirmed calls for federal intervention, urging lawmakers in Washington to pass complementary national legislation, such as the Motion Picture, Television, and Entertainment Revitalization Act, to establish a federal baseline credit for production companies nationwide.
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