Gavin Newsom Floats $750 Million Handout For Hollywood

Democratic Gov. Gavin Newsom unveiled a proposal Sunday that would more than double the size of a tax credit program aiming to boost Hollywood. The proposal would raise the state’s Film & Television Tax Credit Program…

Wallace WhiteOct 28, 20244 min read

Sponsored

Democratic Gov. Gavin Newsom unveiled a proposal Sunday that would more than double the size of a tax credit program aiming to boost Hollywood.

The proposal would raise the state’s Film & Television Tax Credit Program from $330 million annually to $750 million a year, Newsom announced. Hollywood has been struggling to keep up with rising costs, an industry push towards streaming and declining revenues at the box office, according to multiple reports.

“California is the entertainment capital of the world, rooted in decades of creativity, innovation, and unparalleled talent,” Newsom said during the press conference. “Expanding this program will help keep production here at home, generate thousands of good-paying jobs, and strengthen the vital link between our communities and the state’s iconic film and TV industry.”

The program was created in 2009 to keep film production in the state, with the industry generating $226 billion in sales and paid out 192 billion in wages in 2020, according to a Motion Pictures Association report.

Newsom argued that the expansion would make California the top state once more in film incentive programs, according to a Sunday press release. Over half of projects went out-of-state when they were denied tax credits from the program, according to the Los Angeles County Economic Development Corporation (LAEDC) in 2023.

Sponsored

The film projects that left would have generated an estimated $7.7 billion in revenue and supported 28,000 jobs, according to the LAEDC. The states that received the largest economic impact from incoming studios included Georgia at $551 million, New Mexico at $250 million and New York at $186 million.

In 2023, the Screen Actors Guild and Writers Guild of America went on strikes that cost the industry $6.5 billion in total, according to Deadline.

The industry’s problems extend beyond costly strikes, with the city’s share of film and TV jobs dropping by 33% from 2022, according to Business Insider. Productions filmed in the U.S. declined by 37% from 2022, according to industry tracker ProdPro.

Hollywood has struggled to regain its footing since the COVID pandemic, which wiped out $4 billion in domestic revenue from 2019 to 2020, according to Forbes in 2021. Additionally, box office revenues declined 20% from 2019 to 2024, according to Observer in May.

California ranks 29th out of 50 in the ease of doing business, according to a CNBC study in 2022. Additionally, the state has the 3rd worst cost of doing business and received the same ranking in “business friendliness,” which measured the general administrative burden for companies in the state.

“Hollywood is the cornerstone of this city and our economy and our message to the industry today is clear – we have your back,” Democratic Los Angeles Mayor Karen Bass said during the press conference. “When I was Speaker of the California State Assembly, I worked to support leaders like now-Councilman Paul Krekorian to create the film tax credit. Despite the economy being in a difficult spot, we knew that the industry needed support, and if we could at least start the program, then we could grow it. Today I’m proud to stand with Governor Newsom and industry leaders to continue this important work supporting this legacy industry.”

A spokesperson for Newsom’s office reiterated the points made in the Sunday press release, as well as emphasizing how California’s economy has outpaced the country in economic growth on average, according to an October Public Policy Institute of California report. The spokesperson also added how Georgia spent more than $1 billion themselves to subsidize movies, according to The Associated Press.

Editor’s note: This article has been updated to include information shared by Gov. Newsom’s office.

(Featured Image Media Credit: Screen Capture/CSPAN)

All content created by the Daily Caller News Foundation, an independent and nonpartisan newswire service, is available without charge to any legitimate news publisher that can provide a large audience. All republished articles must include our logo, our reporter’s byline and their DCNF affiliation. For any questions about our guidelines or partnering with us, please contact [email protected].