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California’s Film Industry Faces Continued Decline Despite Proposed Tax Incentive Increase

Governor Newsom's proposal to raise tax credits to $750 million is seen as insufficient to counter the migration of productions and talent to more competitive regions.

US actor Ben Affleck at the Amazon MGM Studios The Accountant 2 premiere at the TCL Chinese Theatre in Hollywood, California.
Image
Ben Affleck.
LOS ANGELES, CALIFORNIA - OCTOBER 27: California Governor Gavin Newsom speaks during a press conference at Raleigh Studios unveiling a vast expansion of California’s Film and Television Credit Program on October 27, 2024 in Los Angeles, California. Newsom and Los Angeles Mayor Karen Bass announced a proposal which would expand the program to $750 million annually, a major increase from the $330 million currently allocated, amid sluggish film and TV productions in Hollywood and across California. (Photo by Mario Tama/Getty Images)

Overview

  • Film production in California has dropped significantly, with Los Angeles shoot days down over 20% and annual production declining by 58% between 2021 and 2024.
  • Governor Gavin Newsom's proposal to double annual tax credits to $750 million is under legislative review but widely criticized as inadequate by industry stakeholders.
  • States like Georgia and New Mexico, along with countries such as the UK and Ireland, offer uncapped or more attractive incentives, drawing productions away from California.
  • The exodus of productions has led to the migration of skilled technicians and crews, further weakening the state’s production capacity and workforce.
  • High-profile figures, including Ben Affleck and Rob Lowe, have publicly criticized California’s policies, citing economic inefficiencies and the state’s failure to retain its entertainment industry dominance.