Newsom seeks to raise California's film and TV tax credit to at least $1 billion a year, a year after more than doubling it

Gov. Gavin Newsom on Monday called for California's film and television tax credit to grow again, to at least $1 billion a year, one year after lawmakers raised the annual cap from $330 million to $750 million.

The plan, announced in Hollywood, would do the following, according to the governor's office:

• raise annual credit funding above $1 billion
• make above-the-line pay for a production's leading creative talent a qualified expense, subject to funding caps
• lengthen the program's life from five years to 10, through 2040
• give a 5% bonus to companies that commit to at least two separate qualifying productions in the state
• set aside $100 million a year for independent films, $26 million more than now

Newsom also repeated his call for Congress to pass a federal film and TV credit that productions could combine with state incentives.

What supporters point to

The governor's office said the first year of the expanded credit brought an 82% jump in applications, $8.25 billion in direct production spending so far and more than 43,000 cast and crew jobs. It also cited a Los Angeles County Economic Development Corporation estimate that every dollar of credit has produced $24.40 in economic output.

Assemblymember Rick Chavez Zbur, a Democrat from Hollywood, said last year's expansion is "delivering results."

The skeptics' case

The Legislative Analyst's Office, the Legislature's nonpartisan fiscal adviser, reviewed last year's expansion and reached a narrower conclusion. Its February 2025 analysis found that the credit likely does draw productions that would otherwise film elsewhere and modestly enlarges the state's film industry, but that there is "weak evidence" it benefits California's economy as a whole.

The office said the LAEDC figures are very likely overstated, noted that state film incentives generally return less than a dollar in tax revenue for each dollar awarded, and advised lawmakers to expand the credit only if keeping Hollywood's market share is a priority in its own right.

Sources

gov.ca.gov

lao.ca.gov