California legislators endorse expanded $750-million film incentive program

California legislators endorse expanded $750-million film incentive program

Title: California Turbocharges Hollywood with Major Tax Credit Boost, Bolstering Competition and Job Market

Hollywood is breathing a sigh of relief after a grueling few years battling the pandemic, strikes, and wildfires. California lawmakers have voted to skyrocket the annual funding for the state's Film and Television Tax Credit Program, jumping from a measly $330 million to a whopping $750 million.

This upgrade has Hollywood's studios, producers, unions, and industry workers claiming victory after months of tireless lobbying. State legislators have been courting productions away from California with hefty tax incentives, leaving countless industry workers jobless for extended periods. In no-nonsense interviews, town halls, and legislative committee hearings, these workers voiced their fears that Tinseltown was following in the footsteps of Motor City Detroit, post-auto industry heyday.

"It's high time to bring workers back to the job and return production to the Golden State," said Rebecca Rhine, Executive of the Directors Guild of America and President of the Entertainment Union Coalition, in a press release. "We call upon studios to recommit to the honest-to-goodness communities and workers across California that built this industry and fortune!"

Governor Gavin Newsom expressed his desire to expand the tax credit program last year, stating prophetically, "The world we invented is now competing against us."

Following Newsom's lead, state lawmakers are now extending the provisions of the program. An accompanying bill making its way through the Legislature will broaden the types of productions eligible, like animated films, shorts, series, and certain large-scale competition shows. The bill would also augment the tax credit to as much as 35% for movies and TV series shot in Greater Los Angeles and a whopping 40% for productions shot outside the region.

This new piece of legislation, AB 1138, received unanimous approval from the state Senate Revenue and Tax Committee and is slated for final votes next week.

California's tax credit offers 20-25% relief for filming expenses such as crew salaries and set construction costs. These credits can be applied to any California tax liabilities. Bumping the credit rate to 35% puts California on a more level playing field with incentives offered by other attractive states like Georgia, which boasts a 30% credit for productions.

Industry experts stress that both the increased tax credit and the proposed modifications to the incentive program must be approved to truly revitalize California's film and TV sector. The bill was drafted by Assemblymember Rick Chavez Zbur (D-Los Angeles) and state Sen. Benjamin Allen (D-Santa Monica).

"After years of uncertainty, it's finally time to hit record and embrace the limelight—because California is keeping film and TV jobs firmly in place, right where they ought to be," Zbur declared in a statement about the $750-million funnel. "This bold investment in our creative economy, working families, local businesses, and communities is crucial for the future of California's entertainment powerhouse!"

• Insight: The expanded tax credit program in California has spurred a new wave of film and TV projects, projected to generate $664 million in economic activity and employ over 6,500 cast and crew members across the state[1][2]. These projects involve substantial wages (over $302 million) and high numbers of background performers, bringing significant benefits to California's workers[2]. By incentivizing projects to shoot outside Los Angeles and investing in training and career pathways, the program also supports and sustains the state's entertainment ecosystem.
• Insight: The tax credit program helps California compete on multiple levels with other regions, attracting both major studios and independent films amidst stiff competition from other states and countries. As a result, the number of projects awarded tax credits has reached record levels, with 51 projects selected previously and 48 recently[2], indicating growing demand and the effectiveness of the incentives in drawing productions to California.
• Insight: The boosted tax credit promises to create jobs, pump dollars into local economies, and preserve California's status as a global entertainment hub, while also seeking to support diverse and underrepresented communities within the industry[1]. These initiatives are essential for maintaining California's entertainment legacy for future generations.

1. The surge in funding for California's Film and Television Tax Credit Program to $750 million has been welcomed by Hollywood studios, producers, unions, and workers, after a challenging period marked by the pandemic, strikes, and wildfires.
2. With this upgraded tax credit, California is aiming to compete effectively with other attractive states like Georgia, offering a 35% tax credit for movies and TV series shot in Greater Los Angeles and a 40% credit for productions shot outside the region.
3. The new legislation, AB 1138, has received unanimous approval from the state Senate Revenue and Tax Committee and is scheduled for final votes next week, broadening the types of productions eligible, including animated films, shorts, series, and competition shows.
4. Industry experts emphasize that both the increased tax credit and the proposed modifications to the incentive program must be approved to fully revitalize California's film and TV sector, potentially generating $664 million in economic activity and employing over 6,500 cast and crew members across the state.
5. By incentivizing projects to shoot outside Los Angeles and investing in training and career pathways, the program also seeks to support and sustain California's entertainment ecosystem, including diverse and underrepresented communities within the industry.
6. The expanded tax credit program is expected to create jobs, pump dollars into local economies, and preserve California's status as a global entertainment hub, while also aiming to maintain its entertainment legacy for future generations.
7. This boost in the tax credit promises to bolster California's competitive edge against other regions, attracting major studios and independent films in the entertainment, business, and economics fields, thereby contributing to the overall law and crime landscape of Los Angeles and the entertainment sector.

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