Los Angeles, CA – On a crisp Sunday in late October 2024, hundreds of film and television workers rallied on a local soundstage, urging California lawmakers to approve notable increases to the state’s film and TV tax credit program. The proposed increase, championed by California’s Democratic Governor Gavin Newsom, aims to combat the ongoing exodus of productions fleeing to states with more attractive financial incentives.

The atmosphere was charged with a mix of hope and anxiety as costume designers, set builders, musicians, producers, and actors voiced their concerns. Many attendees donned T-shirts emblazoned with the iconic “Wizard of Oz” quote: “There’s no place like home,” a poignant reminder of the industry’s deep roots in California and the desire to keep it there.

Make Hollywood Hollywood again, said Joely Fisher, an actor and secretary-treasurer of the SAG-AFTRA actors’ union, to cheers.

Fisher’s sentiment captures the core issue: Hollywood, the past heart of American filmmaking, is facing an unprecedented challenge. The rise of streaming services, coupled with aggressive tax incentives offered by states like Georgia, Louisiana, and New York, has created a competitive landscape where California is struggling to maintain its dominance.

The Proposed Tax Credit Boost: A Lifeline for Hollywood?

Governor Newsom’s proposal seeks to more than double California’s annual film and TV tax credits from $330 million to $750 million. This considerable increase is intended to level the playing field and entice studios to keep their productions—and the associated jobs—within the state.

Advocates argue that the tax credit boost is not just about preserving Hollywood’s legacy; it’s about protecting the livelihoods of countless middle-class workers who depend on the film and television industry. these include not only actors and directors, but also the caterers, dry cleaners, and other local businesses that thrive when productions are active in the area.

California needs to stop taking Hollywood for granted, said filmmaker Sarah Adina Smith, an organiser of the Stay in LA campaign that has pushed studios to increase their filming in the city.

Smith’s “Stay in LA” campaign underscores the urgency of the situation. The concern is palpable: If California doesn’t act decisively, it risks losing a vital economic engine and a significant part of its cultural identity.

If we don’t stop the bleeding, then Los Angeles is at risk of becoming Detroit, she added. This is a great, iconic American industry, a home-grown industry, and we’re losing it at an alarming rate.

the comparison to Detroit, a city that experienced a dramatic decline after the auto industry moved elsewhere, is a stark warning. It highlights the potential for widespread economic hardship if Hollywood continues to shrink.

Beyond Tax Credits: Addressing Bureaucratic Hurdles

While the proposed tax credit increase is a crucial step, advocates emphasize that it’s not a silver bullet. They also call for streamlining the permitting process and reducing bureaucratic red tape that can make filming in California a logistical nightmare.

Consider the example of securing permits for street closures or filming in public spaces. In certain specific cases, these processes can take weeks or even months, adding significant costs and delays to productions. simplifying these procedures could make California a more attractive filming location, even without matching the tax incentives offered by other states dollar for dollar.

The Human Cost: Musicians and the Vanishing Opportunities

The decline in film and television production has a direct impact on the lives of ordinary workers. Songa Lee, a violinist who has played on film scores for 25 years, shared her personal experience:

Musicians across the globe moved to LA because there was always the idea that you could actually have a decent living, she said. As soon as the work’s not here, that talent won’t come here anymore, which we’re beginning to see. We’re losing talent.

Lee’s story is a microcosm of a larger trend. The erosion of work opportunities is forcing talented individuals to leave California, taking their skills and expertise with them. This brain drain could have long-term consequences for the state’s creative ecosystem. She noted that work opportunities on union productions in the area had fallen from roughly 30 a year to fewer than 10.

The Broader Economic Impact: More Than Just Hollywood

The film and television industry is a significant contributor to California’s economy.According to a California Film Commission report, the industry generates billions of dollars in revenue each year and supports hundreds of thousands of jobs across various sectors.

The following table illustrates the estimated economic impact of film and television production in California:

These figures demonstrate that the stakes are high. If California loses its grip on the film and television industry, the economic consequences could be far-reaching, affecting everything from tourism to real estate.

The Counterarguments: Are Tax Credits the Best Approach?

While there is broad support for increasing California’s film and TV tax credits, some critics question whether this is the most effective way to address the industry’s challenges. One argument is that tax credits primarily benefit large studios, while doing little to support independent filmmakers or smaller production companies.

Another concern is that tax credits create a “race to the bottom,” where states compete to offer the most generous incentives, potentially leading to a situation where taxpayers are subsidizing the film industry without seeing a significant return on investment.

Rather of focusing solely on tax credits, some argue that California should invest in infrastructure improvements, workforce development programs, and other initiatives that would create a more enduring and competitive film industry in the long run. this could include upgrading soundstages, providing training opportunities for aspiring filmmakers, and promoting California as a hub for innovation in film technology.

Recent Developments and Future Outlook

As of April 2025, the California legislature is actively considering Governor Newsom’s proposal to increase the film and TV tax credits. The outcome of this debate will have a significant impact on the future of Hollywood and the state’s economy. While the increased competition has affected California, the state brought in $3.3 billion in film and television spending in 2023, according to the California Film Commission.

Beyond the legislative arena, there are signs that the industry is beginning to adapt to the changing landscape. Some studios are exploring new business models,such as co-productions and international partnerships,to reduce costs and access new markets.

Additionally, there is a growing emphasis on creating original content for streaming platforms, which could provide new opportunities for California filmmakers and create a more diverse range of stories being told.

Conclusion

Hollywood is at a critical juncture. The proposed increase in California’s film and TV tax credits represents a significant effort to revitalize the industry and protect the livelihoods of countless workers. Though, it’s clear that tax credits alone are not enough. California needs a complete strategy that addresses bureaucratic hurdles, invests in infrastructure, and fosters innovation to ensure that Hollywood remains a vibrant and competitive force in the global entertainment landscape.