California Doubles Film Tax Credits in Bid to Revive Hollywood Amid Global Competition
Published On: June 4th, 2025
In a high-stakes move to reclaim Hollywood’s fading dominance, California Governor Gavin Newsom has proposed more than doubling the state’s film and television tax credit program from $330 million to $750 million annually. The expansion, now advancing through the legislature, aims to reverse a decade-long exodus of productions to cheaper locales like Georgia, the UK, and Australia—a crisis exacerbated by the 2023 strikes, wildfires, and President Donald Trump’s recent threat of 100% tariffs on foreign-made films.
The jobs gamble
Proponents frame the credit as a lifeline for California’s middle-class crew members—grips, electricians, and caterers—who have borne the brunt of runaway production. The California Film Commission estimates the $750 million cap could create 4,400–5,500 direct jobs, although that is just a fraction of the 40,000 lost since 2022. Critics, however, argue the subsidies disproportionately benefit studios without guaranteeing long-term growth.
“This isn’t a panacea,” admits Assemblyman Rick Chavez Zbur, a key backer. “But it will stem the steep slide.” The Milken Institute projects a ripple effect of 14,886 total jobs, while the Legislative Analyst’s Office warns such credits may merely “crowd out” other economic activity.
Trump’s tariffs and the global backlash
The California push comes weeks after Trump’s tariff announcement, which targeted foreign productions as a “national security threat.” The move sent shockwaves through Hollywood, where blockbusters like Wicked (filmed in the UK) and Kingdom of the Planet of the Apes (Australia) rely on overseas incentives.
Newsom countered by proposing a $7.5 billion federal tax credit, but Trump dismissed the idea, calling the governor “grossly incompetent.” Meanwhile, the UK, Australia, and Canada vowed to defend their film industries, with Bectu, a British union, warning tariffs could deliver a “knock-out blow” to their post-pandemic recovery.
The race to the bottom
California’s bid mirrors incentives elsewhere:
- New York boosted its annual credit to $700 million, adding perks for upstate shoots and musical scoring
- Georgia reinstated post-production credits and streamlined audits to retain projects like Tulsa King
- Texas and New Mexico are expanding programs, while the UK and Australia offer 30–40% rebates
Yet even with higher credits, California’s costs remain a hurdle. The state pays $30,000 per job created—half New York’s rate—and excludes “above-the-line” star salaries from qualifying expenses.
The view from the ground
For below-the-line workers, the stakes are existential. “LA is at risk of becoming Detroit,” warns filmmaker Sarah Adina Smith, referencing the hollowed-out auto industry. Crew members like Greg Bartlett argue the $750 million credit is “too little, too late” but concede “anything helps”.
Meanwhile, global audiences face collateral damage. Tariffs could spike ticket prices for foreign films like Parasite or anime hits, while US studios might slash budgets to absorb domestic production costs.
California’s gamble reflects a stark reality: Hollywood’s golden age as an unchecked global leader is over. Whether tax credits can revive it—or merely slow its decline—remains uncertain. As FilmLA’s Philip Sokoloski notes, “We’ve maintained leadership for a century. Now, it’s ours to lose”.