Newsom proposes raising California film tax credit to $1 billion
Gov. Gavin Newsom wants to raise California's film and TV tax credit from $750 million to at least $1 billion a year, cover actors' salaries and extend the program through 2040. His term ends Jan. 4, so his successor and the Legislature would have to carry it out.
AI-assisted · US Brief desk · Sources listed below
What happened
California Gov. Gavin Newsom on Monday proposed raising the state's film and TV tax credit from $750 million a year to at least $1 billion, Variety reports. The plan would also extend the program through 2040.
What the plan would change, per the governor's office: Credits could cover "above-the-line" spending such as actors' salaries, "subject to appropriate funding caps." Independent films would get $100 million a year, up $26 million. Companies that commit to at least two productions in California would get a 5% boost in credits. The program's sunset would move from five years to 10.
The case for: "California created the modern entertainment industry; we're the capital of entertainment and we're going to keep it here," Newsom said in a statement. His office says the current credit has led to $8.24 billion in direct production spending to date, including $3.2 billion in wages for more than 43,000 cast and crew jobs. Newsom also renewed his call for Congress to pass a federal 20% production tax credit, a bill Variety says has bipartisan support, by the end of 2026.
Why it matters
Los Angeles has been losing film and TV work to other states and countries that offer bigger incentives. California more than doubled its credit last year, from $330 million to $750 million, but production in the state has kept falling, according to Variety.
More context
The case against: The nonpartisan Legislative Analyst's Office, in its analysis of last year's expansion, found that the credit likely makes California's film industry bigger but that there is "weak evidence that expanding the tax credit would benefit California's economy as a whole." It noted that projects receiving credits averaged about $2.5 billion a year in spending, compared with a $54.4 billion state motion picture industry, and that the state faces projected operating deficits of $20 billion to $30 billion a year. Weak spot for supporters: the bigger credit has not yet reversed the production decline.
What is still unknown: who will carry the plan forward. Newsom's term ends Jan. 4. Xavier Becerra, the Democratic nominee for governor, has promised to enhance the credit but has been vague about the details, Variety reports. Many industry groups are pushing for an unlimited credit. Weak spot for critics: union leaders and a Motion Picture Association representative told state lawmakers that California must do more to compete with other states' incentives, Variety reports, and the analyst's office has said a bigger credit is a valid way to increase production in the state.
Bottom line: Newsom wants to spend more to keep Hollywood at home, but the Legislature and the next governor will decide whether the state can afford it.
2 listed sources
- Variety, Nov. 2, 2026
- California Legislative Analyst's Office, "The 2025-26 Budget: California's Film Tax Credit"
References listed by US Brief; a source count is not a verification score.
Editorial sourcing notes
Sourcing: Variety for the proposal, the governor's statement and the office's spending and jobs figures; the nonpartisan Legislative Analyst's Office for its analysis of last year's expansion and the state's projected deficits. The spending and jobs totals are the governor's office's claims and have not been independently verified. The hero photo is a 2012 file image of a film shoot in downtown Los Angeles.
Like US Brief? You can support it with a tip.