Outgoing California Governor Gavin Newsom has proposed increasing California’s film and television tax incentive program from $750 million to more than $1 billion. If approved, the change would make the state’s capped program the largest of its kind in the United States.
Newsom said the expansion would bring more investment to California and create additional opportunities across the entertainment industry. He also urged Congress to advance federal film and television tax credit legislation, arguing that states should not carry the full cost of supporting production.
The proposal includes several changes to the program. Eligibility would be expanded to cover above-the-line expenditures, including compensation for leading creative talent, subject to funding limits. The plan would also extend the program’s sunset period from five years to 10 years, giving productions greater certainty for long-term planning.
Companies that commit to at least two separate qualifying productions in California would be eligible for a 5% tax credit increase. The proposal also calls for annual funding for independent films to rise to $100 million, $26 million above the current level.
Newsom is unlikely to secure legislative approval before leaving office in January 2027. However, the proposal could receive consideration under his successor. Former California attorney general and U.S. health secretary Xavier Becerra, who is described as leading the race, and Republican rival Steve Hilton have both presented plans to strengthen the state’s production incentives.
The announcement follows a separate $10 million post-production tax credit signed into law by Newsom in September. His latest proposal would retain a cap on incentives, a measure intended to support Hollywood while preserving the state’s balanced budget.
The next recipients of California’s film and television tax credits are expected to be notified before Thanksgiving. The most recent round, announced October 7, involved an anticipated $1.08 billion in in-state spending and included projects such as the sequel to Lionsgate’s Michael Jackson biopic Michael, New Line’s Friday sequel Last Friday and a new film from independent director Mike Mills.
Sources: Deadline.