California Film Credit expansion claims to bring back jobs; effect remains uncertain

Economic Times

04-06-2025

iStock California Film Credit expansion
California legislators are moving to greatly expand the state's Film and Television Tax Credit Program as a means of stopping the flow of runawaproduction and revitalizing a struggling entertainment industry. The expansion, if approved, would double the program's annual limit from $330 million to $750 million. But, even with the broad changes, analysts and industry officials warn that the effect on employment might not be as dramatic as anticipated.
As reported by the California Film Commission, the expansion would increase direct employment by 40–50%, or approximately 4,400 to 5,500 new cast and crew jobs. However, this is only a small portion of the 17,000 jobs that have been lost since 2022, according to figures presented by the Motion Picture Industry Pension and Health Plan.
The Bureau of Labor Statistics further reports that California experienced a decline of approximately 40,000 jobs within the industry since before the pandemic, with some entertainment unions having claimed that as much as half of their members have been laid off.
Assemblyman Rick Chavez Zbur, chief sponsor of the expansion, recognized the limitations: 'This is not a panacea. It will not reverse the steep slide in jobs, but it will bring some of the jobs back.' He pointed out that increasing the payout might attract more high-budget films to film in California instead of abroad, although the state's incentive is still smaller per job than those from New York and Georgia.
Economic studies provide conflicting views. A recent study for the Milken Institute indicated the expansion could create an additional 14,886 jobs accounting for ripple effects on the economy. The California Legislative Analyst's Office has challenged such assertions, however, to say there is "no compelling evidence" film tax credits significantly improve the overall state economy and that incentives instead could simply displace other economic activity.
Industry supporters, such as Local 724's Alex Aguilar and Rebecca Rhine of the Directors Guild of America, recognize that any forward movement is necessary. Rhine commented, 'While more resources would lead to more jobs, we recognize the challenges of the current moment and competing priorities. Action is necessary now, and we cannot allow the perfect to be the enemy of the good.'The California Film and Television Tax Credit Program is a state incentive program that provides film and television production companies with tax credits they can use to offset part of their qualified costs in order to incentivize them to film their productions in California. The overall objective of this program is to assist in the creation and retention of jobs within the entertainment sector in the employments of Californians that benefit not just the actors and directors but also the large network of crew, technicians, and local businesses dependent upon film and television production.Under the plan, eligible productions—feature films, TV series, miniseries, and pilots—can qualify to get tax credits normally between 20% and 25% of their qualified expenditures, based on the type of project and whether produced by an independent or non-independent firm.These credits cut into the tax obligation of the production companies directly, so it is more desirable for them to shoot in California than elsewhere in other states or nations that provide similar incentives.The program is specifically designed to generate the highest employment. For example, productions have to spend a minimum of 75% of their production budget or principal photography days in California in order to qualify, so that lots of money is spent locally and employment is generated for the people of California.