A California Chamber of Commerce- supported bill to help grow and retain jobs in one of California’s signature industries has been signed into law.
AB 1138 by Assemblymember Rick Zbur (D-Hollywood) and Sen. Ben Allen (D-Santa Monica) is a Cost Cutter that will more than double the state’s film and television tax credit to $750 million annually. It took effect immediately upon being signed by Gov. Gavin Newsom on July 3.
At a recent event in Burbank, Newsom announced that 16 new television shows would be awarded through the state’s film and television credit program.
He projected those projects will generate $1.1 billion in new economic activity and bring nearly 6,700 cast and crew jobs to locations across California.
The annual cap on the previous credit was $330 million. The Governor’s office reported that more productions applied in previous years than could be funded, with an estimated 69% of the rejected projects being filmed outside of the state.
Industry Economic Output
The tax incentive has proven effective in maintaining and growing California jobs in the industry in previous years. According to the California Film Commission, film and television productions provide more than 700,000 jobs and pay nearly $70 billion in wages to California workers.
California’s Film and Television Tax Credit Program contributed nearly $21.9 billion in economic output over five years and supported more than 110,000 total jobs in the state, according to a study released by the Los Angeles County Economic Development Corporation (LAEDC).
The second iteration of the tax credit (dubbed Program 2.0) ran from July 2015 through June 2020. It allocated $330 million per year in tax credits to fight “runaway production” and grow film/TV production-related employment and spending across the state.
The LAEDC study found that for every tax credit dollar allocated, the state benefitted from at least $24.40 in economic output, $16.14 in gross domestic product (GDP), $8.60 in wages and $1.07 in state and local tax revenues.
The program also returned an estimated $961.5 million in tax revenue to state and local governments.
California’s Film and Television Tax Credit Program 3.0 started in July 2020. Despite launching during the pandemic, it generated hundreds of millions of dollars in wages to below-the-line workers and payments to in-state vendors.
Beyond the financial impacts that were the focus of the LAEDC’s report, the most recent program delivered additional benefits. For example, the California Film Commission’s Career Pathways Program, which is funded entirely by projects in the tax credit program, trains entry-level workers for a wide range of production-related jobs and has proven effective at reducing the economic, geographic and social barriers to career success.
New Projects
According to the Governor’s office, the 16 new projects to film in California include nine renewals, two pilots, four new shows, and one relocating show.
In addition to hiring 6,664 cast and crew members, the 16 projects are expected to hire 59,000 background performers (measured in days worked), across 1,308 total California filming days.
The nine returning TV series include “The Pitt” on HBO Max, “Paradise” on Hulu, and “NCIS: Origins” on CBS.
Two shows will film outside of the Los Angeles area for a total of 23 filming days.
The relocating series is Prime Video’s “Mr. & Mrs. Smith.”
See the full list of productions that are part of the Film and Television Tax Credit Program on the California Film Commission website.
Program 4.0 began on July 1. The tax credits have become refundable for all projects for the first time since the program began in 2009. The television application cycle was scheduled for July 7–9; the film application cycle is set for August 25–27. Program 4.0 also includes a diversity workplan provision and increased training funds for the Careers Pathway Program.
