On March 5, 2025, California’s entertainment industry leaders and key lawmakers met in Sacramento, signaling strong bipartisan support for expanding California’s film and television production incentives. The gathering underscored the state’s commitment to keeping Hollywood productions and jobs within California. However, many industry insiders believe these actions are far too little, far too late.
New Tax Incentives: A Bold but Insufficient Proposal
Governor Gavin Newsom’s proposal to more than double the current film and television production tax credits—from $330 million annually to an impressive $750 million—was a focal point of the discussions. Despite the magnitude of the investment, critics argue this measure is inadequate and overdue, highlighting Governor Newsom’s repeated inability to proactively protect the best interests of California’s economy.
Legislative Action to Expand Eligibility
California lawmakers introduced two key bills—Assembly Bill 1138 and Senate Bill 630—that would expand eligibility for the tax credits. These bills specifically aim to support a wider variety of content, including reality television and streaming projects, sectors increasingly critical to the state’s entertainment economy.
Senator Ben Allen pointed out a stark statistic: Approximately 77% of productions rejected for California’s existing tax incentives ultimately relocate to other states or countries, resulting in nearly a billion dollars in lost local revenue each year. Addressing this loss is critical to sustaining California’s vibrant economy and its extensive network of industry-related jobs.
Advocating for Workers First
During the meeting, union representatives from SAG-AFTRA, the Writers Guild of America West, and California IATSE emphasized that tax incentives should benefit workers directly, rather than increasing corporate profits alone. Rebecca Rhine of the Directors Guild of America highlighted that retaining productions within California is crucial for preserving jobs that are vital to local communities and the broader state economy.
The Impact on California’s Economy
Boosting tax incentives and broadening eligibility criteria is expected to significantly bolster employment within the state. Enhanced incentives will likely attract more productions, stimulating related sectors like hospitality, transportation, and technology, and thereby benefiting California’s economy as a whole.
What’s Next for Hollywood and Sacramento?
The productive dialogue between Hollywood’s leaders and California lawmakers marks an important step forward. However, skepticism remains about Governor Newsom’s commitment and whether these measures are sufficient to reverse years of economic loss. As these legislative measures move ahead, the entertainment community and critics alike will be closely watching to determine if these reforms can truly secure California’s future as a thriving center of film and TV production.
Stay tuned as we follow these developments closely, tracking the positive and negative impacts expected from this contentious collaboration between Hollywood and Sacramento.
