It’s Showtime for Hollywood at California Capitol.
The state entertainment industry spent months to begging Sacramento’s help to stem the decline in film and televised production and save thousands of jobs.
This week, after months of speech and promises of civil servants, two bills aimed at stimulating the besieged company erased their first legislative obstacles.
The bills are intended to make the production of film and television in California more competitive with other states and countries by increasing the tax credit up to 35% of qualified expenses and expanding the types of productions that would be eligible.
It is a potential lifeline for the entertainment industry, which has been beaten in recent years by production slowdowns formed by the pandemic, the strikes of double writers and actors in 2023, a decline in studios spending, recent forest fires and production and production of southern California that flee the golden state.
“We do not want to become the automotive industry in Detroit or aerospace in California,” said Rebecca Rhin, president of entertainment Union Coalition and executive director of the America. “When our prosperous industry, we think that California prosperous.”
The bills won unanimous votes from the income and taxation committee of the State and the Committee on the Arts and Entertainment of the Assembly.
But despite the initial call of Governor Gavin Newsom last year to more than double the money allocated to the credit broadcast at the tax on film and television of the State, the adoption of the two invoices is far from being concluded.
Critics are skeptical about the program of film and television tax credits since its introduction in 2009 under the former governor Arnold Schwarzenegger. Some say that tax credits are companies’ gifts and do not offer as much economic value as supporters claim it.
“The economy is best when the government does not choose the winners and the losers,” said Wayne Winegarden, a principal business and the economy at the Pacific Research Institute, a reflection group in California who advocates free markets. “It is not the right way to obtain a pro-corporate budgetary commercial environment that accelerates employment growth.”
In addition, California is now confronted with a difficult economic perspective, as officials are preparing for potential reductions in federal financing, as well as pressures related to the prices on states income and market volatility that could reduce the tax collections that finance state programs.
This forces difficult issues for legislators on the priorities to be financed.
In a recent article on X, the member of the Corey Jackson Assembly said that Democratic voters in California “should be indignant that we do not spend more for housing, allowing the elderly to fall into homelessness and allow so many children to live in poverty. For tax alternatives of businesses and moviegoers.”
Reached by phone, Jackson said that, although the expansion of film and television tax credits is a worthy policy, state legislators must consider what they should sacrifice for them, especially since the state budget is under stress.
“If we were back in the period when we have more money than we can spend, it would be obvious,” said Jackson. “But it’s time to bring people back to reality. It shouldn’t only be a slam-dunk to people.”
Hollywood workers argue that an enlarged film and television tax credit would generate economic yields beyond industry, with training effects affecting tourism as well as small businesses such as dry cleaners, florists and caterers based on entertainment. And after years of difficulty, workers say that industry is at an inflection point.
This led to a major lobbying effort on the part of Hollywood.
More than 100,000 letters were sent to individual state legislators supporting the bills, with 22,000 additional letters sent to the Senatorial Revenue and Tax Committee.
Dozens of representatives of all the main unions in the entertainment industry went to Sacramento to support legislation, as are studio leaders, their lobbyists and the film Assn. Commercial group.
This is the kind of demonstration of the force, Senator Ben Allen and the member of the Assembly Rick Chavez Zbur, two of the Bills co-sponsors, had called when they spoke to a crowd last week in the recording facilities of the Evergreen studios in Burbank and urged entertainment workers to contact their representatives.
“It will be a fight to do so because of the opposite winds,” said Allen at the crowd, noting that there are many competing priorities at the state level. The simple mention of the legislation was sufficient to arouse applause and the applause of the public.
The initiates of the industry and the legislators, including at the City Hall of Burbank, tried to criticize that it is a gift for companies.
They described them as employment bills that will reward the productions that generate the most employment and will not allow companies to use tax credits before the end of production.
California currently offers a tax credit of 20% to 25% to compensate for qualified production costs, such as money spent for filming teams and buildings. Production companies can apply credit to all tax liabilities they have in California. The 35% increase in credit is significant, according to supporters. Projects that draw elsewhere in the state could obtain a 40%credit.
The legislation would also expand the types of productions that would be eligible, including animated films, shorts and series, as well as large -scale competition emissions. Independent productions will be awarded 10% of the total amount of the program, compared to 8% current.
“In some respects, the opposite winds have in fact strengthened the bill,” said Allen in Times. “They forced very cautious, intense, thoughtful and targeted conversations and negotiations.”
Apart from Hollywood, the bills have the support of California Labor Federation, whose executive council voted unanimously to support the legislation in February, said president Lorena Gonzalez.
Although the organization does not always support tax credits, the Federation has always supported the cinematographic and televised program, she said.
“The fact is that the unique situation with Hollywood being so unionized,” said Gonzalez. “In order to preserve these good union jobs and middle class lives that are developed accordingly, we would like to keep these jobs here.”
The lobbying effort led to unusual alliances, in particular following strikes, Hollywood studios and unions gathering on the same side. However, the two groups worked together on previous credit proposals at films and television tax.
In a letter to the leaders of the Committee of the Assembly on income and taxation, Motion Picture Assn. Manager Charles H. Rivkin wrote that changes to the film and television tax credit program would help attract more productions and jobs to California. “”
If the bill was promulgated, he wrote, the studios will submit more requests to the California Film Commission, “leading to locating more of their productions in California, which will create and keep good jobs for Californians”.
But even in the global push of Hollywood, there are different priorities between stakeholders. During the meeting of the town hall of Burbank, post-production workers and music professionals called for cuts, noting that other states and countries now offer specific discounts for this work.
This led to a sharp drop in production for these workers. The average number of recording days reserved for a sampling of Los Angeles score stages is now 11 days for 2025 so far, far from the average of 127 days for all 2022 during the Summit of Boom Streaming, said Peter Rotter, founder of Camamps Music Partners, who helped organize the town hall.
Many rating works have moved to Europe or even in Nashville, while certain post-production works have been diverted to places like Canada and London.
“It will take a village,” said Rotter at Times. “We have a shot right now.”
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