By Emmanuel King
Governor Gavin Newsom used his final weeks in office to place the biggest bet yet on keeping production in California. On Monday, November 2, he proposed expanding the state's Film and Television Tax Credit Program from $750 million a year to at least $1 billion a year, and extending the program through 2040. Announced one day before California voters elect his successor, the proposal would make California home to the largest capped film and TV tax credit in the country, ahead of New York's $800 million annual program. Georgia's incentive, by contrast, has no cap at all.
"California created the modern entertainment industry; we're the capital of entertainment and we're going to keep it here," Newsom said in announcing the plan. "At least $1 billion in tax credits means more investment flowing into our economy and more opportunity across the industry."
What is in the proposal
The headline number is only part of it. The larger change is structural: for the first time, above the line compensation would become a qualified expenditure, meaning pay for actors, directors, writers and producers could count toward the credit, subject to funding caps. California's program has historically covered below the line production spending, which is one reason star-driven packages have kept leaving for states and countries whose incentives reach further up the call sheet.
Independent film funding would rise to $100 million a year, up $26 million from the current program. Companies that commit to at least two distinct qualifying productions in California would earn a 5 percent boost in their credits, a direct incentive to build slates here instead of one-offs. And the program's sunset would stretch from five years to ten, running through 2040, giving studios and series a longer runway to plan around.
Newsom also renewed his call for Washington to act, urging Congress to pass the Motion Picture, Television, and Entertainment Revitalization Act by the end of the year and backing a 20 percent federal credit that could stack on top of state programs.
Why now
The case for moving fast is written in the jobs numbers. A Los Angeles County report released this August found that California has lost 52,016 film and television jobs since 2022, nearly all of them in Los Angeles County, as productions chased richer incentives in Georgia, New York, Canada and the United Kingdom.
The governor's argument is that the current program is already proving the model. Last year's expansion, which raised the annual credit from $330 million to $750 million, produced a first year in which applications jumped 82 percent, direct production spending reached $8.25 billion, and qualified wages hit $3.2 billion. The program supported more than 43,000 cast and crew jobs and 261,000 background performer days, film shoot days rose 52 percent, and more than 8,600 filming days were logged across the state. Fallout relocated to California for its second season, and series including The Pitt and Tracker are among the productions the credit has kept or brought home. Since the program began in 2009, it has generated more than $35.4 billion in economic activity and supported over 248,000 cast and crew jobs.
The reaction, and the catch
California Film Commission director Colleen Bell and GO-Biz director Dee Dee Myers both praised the proposal, and Assemblymember Rick Chavez Zbur, whose district covers Hollywood, is backing it in Sacramento. The unions were more measured. The Entertainment Union Coalition, which speaks for SAG-AFTRA, IATSE, the DGA, the WGAW, the Teamsters, the AFM and LiUNA, thanked the governor while pointing its message at the next governor, pressing for a proportionate response that modernizes the program's structural limits. The secretary-treasurer of Teamsters Local 399 was blunter, calling the plan "a day late and yet again, some dollars short," and arguing that California should uncap the credit entirely to compete with New York and international rivals.
The catch is timing. Newsom is term-limited and leaves office in January, and there is little chance he can push a billion-dollar expansion through the Legislature himself. The proposal is, in effect, a commitment test for whoever replaces him. That may not be a weakness: Xavier Becerra, the poll-leading candidate for governor, has put forward a similar blueprint and also favors keeping the program capped, and Republican rival Steve Hilton has floated his own plans to strengthen the credit. Whoever wins on Tuesday inherits this proposal as the opening bid.
What it means for actors and crew
For working actors, the above the line change matters most. When a star's salary counts toward a credit, a production built around name talent gets cheaper to shoot in California, and fewer of those packages default to Atlanta, London or Toronto. Below the line, a bigger annual pot means more productions funded in each allocation round of a program that is already heavily subscribed, and a ten-year runway through 2040 gives returning series a reason to plant roots instead of treating California as a one-season stop. The $100 million independent film fund matters too, because independent features are where most working actors book most of their work, and 261,000 background days in a single year is the kind of volume that keeps day players working.
None of it is law yet. The fight in Sacramento will be over the cap and the structure, not the headline number, and the unions have already made clear they intend to push for more. But the direction is set: California has decided it will pay to keep its signature industry, and the only question left is how much.
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