California lawmakers are raising concerns over a provision in the state budget that could undermine the film and TV tax credit program.
The program, which aims to revitalize Hollywood by attracting production back to California, delivered $6.6 billion in production spending and created nearly 35,000 jobs in its first year, according to the California Film Commission.
More than 40 legislators have urged Governor Gavin Newsom to exempt the film and TV production incentive from a new cap on corporate tax credits. They argue that the cap, which limits tax credits to $5 million or 70% of a company’s state tax liability starting in 2030, could significantly hinder the program’s effectiveness. Assemblyman Rick Chavez Zbur noted that the cap could reverse progress made in recent years.
The new budget, which Newsom signed as his final state budget, includes these limitations as part of a broader fiscal strategy. However, industry representatives and lawmakers worry it could deter productions from choosing California. The governor’s office maintains confidence in the program’s strength and plans to work with industry partners to keep it competitive.
The expanded tax credit program, known as Program 4.0, awarded 170 projects in its first year. These projects included major studio features, independent films, and animated projects, contributing significantly to California’s economy. The program’s success has been attributed to its ability to attract diverse productions and create numerous job opportunities.
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