Newsom Urges Doubling Filming Tax Incentives

Gov. Gavin Newsom has proposed more than doubling California's film tax incentives after pleas from an industry facing difficulties, though it's not clear that such breaks pay off for governments. If approved by the legislature, the state's cap on the TV and film credits would increase from $330 million per year to $750 million, the New York Times reports. "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," the governor said Sunday in a statement.

Film production in California is declining, and economic development officials joined entertainment executives recently in raising the alarm. States competing with California and each other have offered filming incentives totaling more than $25 billion over the past 20 years, a Times survey found. The $750 million cap would be exceeded only by Georgia's unlimited offer. New York has spent at least $7 billion in credits since 2015, and Georgia more than $5 billion. MasterChef, Supergirl, and the Kelly Clarkson Show are among the productions that moved out of California at least partly for more lucrative tax credits, per the Hollywood Reporter. "This means that film production can stay," said Los Angeles Mayor Karen Bass. "It means that all of the jobs that would be lost, because they they would go to another state or overseas, would stay here."

The industry has faced a variety of issues, though, including labor union strikes, prolonged shudowns during the coronavirus pandemic, and technology such as artificial intelligence that could take jobs. And New York last year found was the return on its incentives was between 15 cents and 31 cents on the dollar. "The film production credit is at best a break-even proposition and more likely a net cost" to the state, the report said. Newsom's proposal was welcomed by the head of the California Film Commission, per the Times. "It's not enough anymore just to be the state with the best crews and the best weather and the best locations," Colleen Bell said. (More California stories.)