Newsom Proposes $1 Billion Film Tax Credit Expansion to Retain Hollywood Jobs

Key points

• Newsom proposed increasing California’s film and TV tax credit from $750 million to at least $1 billion annually.
• The expansion would cover above-the-line talent, such as actors and directors, aligning California with states like Georgia and Illinois.
• The proposal extends the tax credit through 2040 and allocates $100 million annually for independent productions.
• Newsom called on Congress to pass a national film and TV tax credit to support the industry.
• The existing $750 million program has generated $8.24 billion in direct production spending, including $5.3 billion in qualified expenditures and $3.2 billion in wages for over 43,000 jobs.

Background

In 2025, California increased its film and TV tax credit from $330 million to $750 million annually to compete with other states and countries. In September 2026, Newsom signed a $10 million post-production tax credit to retain jobs in editing, sound, and visual effects. The current proposal builds on these efforts to address ongoing job losses and production declines in Los Angeles.

How outlets are covering it

Politico and Variety emphasized the expansion’s potential to retain jobs and compete with other states, noting the loss of over 42,000 motion picture jobs in Los Angeles County between 2022 and 2024. Deadline highlighted the political timing, noting Newsom’s proposal was announced the day before the midterm elections and that his successor, Xavier Becerra, would need to carry the proposal forward. The Hollywood Reporter focused on the competitive landscape, noting that New York’s production spending has grown 87% in the latest quarter compared to California’s 17%, and that California’s reign as the top destination for Hollywood spending is being threatened by other hubs. All sources agreed that the expansion aims to provide long-term certainty for studios and producers, but differed on the likelihood of legislative passage before Newsom’s term ends in January 2027.

Why it matters

The expansion could help retain jobs and production in California, which has seen a significant decline in film and TV activity. It also aims to compete with other states and countries offering lucrative incentives, ensuring California remains a key hub for the entertainment industry.

What to watch

The proposal will likely be carried forward by Newsom’s successor, Xavier Becerra, if he wins the midterm election. Congress is also expected to consider the national film and TV tax credit legislation, which could complement state-level incentives. The California Film Commission will continue to distribute the current $750 million in tax credits, with the next round of recipients announced before Thanksgiving.