The California legislature has approved as part of a budget package an increase to the state’s allotment of funds for filming tax credits, moving up more than double from $330 million to $750 million annually, which is right at the originally proposed figure from California Governor Gavin Newsom.
The two bills, SB630 and AB1138, both passed the state senate and assembly early in June, but the line item noting $750 million specifically, which Newsom first suggested last October, was absent, leaving the final total up for negotiation as part of the larger budget debates. The increased tax credits have been designed to incentivize more productions to shoot in the state of California and hold back the tide of film and TV shoots moving out of state or out of country, costing thousands of veteran film professionals jobs in California.
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The funds have been approved through 2035, so it will bring up to $1.5 billion in subsidies to Hollywood over the next decade.
Producer Scott Budnick, who spoke on IndieWire’s Future of Filmmaking Summit back in November, organized a coalition of filmmakers that, as Deadline reported, included Patty Jenkins, Jonathan Nolan, and Cord Jefferson to travel to Sacramento to lobby lawmakers on the need for $750 million as well as other changes to the program.
Some of the other adjustments to the program as part of the legislation include letting other types of TV shows to qualify for the credits, including shorter TV shows and animated shows, and even “large-scale competition” shows.
Many industry stakeholders have argued that current restrictions on the tax credits, such as them not qualifying for above-the-line costs or not covering post-production, are not enough to incentivize studios to stay in California, even if the overall number is higher. California is one of the only major production hubs to restrict the credits for being applied to above-the-line costs.
California is not alone in making aggressive expansions to the credits and rebates it offers film productions, with Louisiana recently salvaging its tax credit, and Texas approving $150 million over the next decade just this month. New York also recently upped its tax credit to $800 million, while Georgia’s tax credit allocation remains uncapped.
The next deadline for productions to apply for a tax credit is July 7. The most recent round of funding saw 48 movies qualify for tax credits. FilmLA recently reported that for the first quarter of 2025, shoot days for feature films were down 28.9 percent from the same period last year, while TV was down 30.5 percent, and shoot days were down 22.1 percent overall for the period.
