Gov. Gavin Newsom on Sunday unveiled a proposal to increase the state’s film incentive to $750 million, responding to calls to boost the struggling industry.
At a news conference at Raleigh Studios in Los Angeles, Newsom said it was important to “make a statement” by more than doubling the grant, which is currently set at $330 million.
“We had to be big and bold,” Newsom said, flanked by labor supporters. “We are in a position where we can afford this, and we have to do this.”
The increase must be approved by the Legislature next year and would take effect in July 2025.
Los Angeles Mayor Karen Bass applauded the proposal, saying it would make a “big difference” in making the state competitive with tax breaks in New York and Georgia.
“Just like we have to do in the World Series, we have to make sure we stay ahead of New York,” Bass said.
Charles Rivkin, the president and CEO of the Motion Picture Association, said on X that he looks forward to working with the Legislature on this issue. He also thanked Newsom for “his commitment to securing CA’s future as a leader in film, television and streaming production.”
Several union leaders also welcomed the move, saying members have struggled to find work and some have been forced to move.
“It was tough,” said Alex Aguilar, business manager of LiUNA Local 724, which represents workers in the industry. “Hollywood is the heartbeat of the entertainment industry and it should remain that way.”
The industry has not yet recovered from the 2023 strikes as production has fallen well below pre-strike levels in recent months, FilmLA licensing data shows.
The state has long sought to protect a landmark industry from the threat of “runaway production” – as studios pursue more attractive subsidies in Britain, Canada and Australia, and in other US states. New York increased its tax breaks from $420 million to $700 million in 2023 as it battles competition from New Jersey.
“Other states and countries, through tax credits, are aggressively pursuing our jobs and succeeding,” said Brigitta Romanov, executive director of the Costume Designers Guild. “We run the risk of losing the sector completely. Filming must stay here.”
Gov. Arnold Schwarzenegger first approved a subsidy for the film and TV industry in 2009, offering $100 million a year. The figure was increased to $330 million under Governor Jerry Brown in 2014.
Newsom, first elected in 2018, temporarily increased the stimulus by $90 million when the state ran a large pandemic-era surplus in 2021.