Overview

• Lawmakers voted 64-1 in the Assembly and 31-3 in the Senate to raise the annual tax credit cap from $330 million to $750 million as part of a $321 billion budget agreement
• Governor Gavin Newsom made the expansion a top priority to help California compete with New York’s $800 million incentive and Georgia’s uncapped credits
• Entertainment unions and the Motion Picture Association mounted a major lobbying campaign, submitting roughly 250,000 letters to lawmakers
• The nonpartisan Legislative Analyst’s Office found no compelling evidence that film tax credits boost the state’s economy, even as production jobs fell by 29% between 2022 and 2024
• Critics point to California’s $12 billion budget shortfall and argue that broad economic relief measures would better serve the state than targeted industry incentives