California Governor Gavin Newsom is making a parting pitch before he leaves office in January: raise the state’s film and television tax credit ceiling from $750 million to $1 billion. The announcement made headlines, but the numbers behind production location decisions tell a different story.
The ceiling is not the same as a cheque
A higher ceiling simply expands how much credit the state could allocate; it does not guarantee new production. The current $750 million cap may be reached this year, but that doesn’t mean enough qualified shoots exist to absorb another $250 million. Even if the full allowance were used, the research says a slightly cheaper production is only one factor in where a film or series shoots.
California’s real disadvantage is price
California already offers one of the most generous credit rates in the US: up to 45% of qualified spend, against a 30% cap in Georgia. What it lacks is affordability. Georgia’s cost of living is 39% lower than California’s, so housing, feeding and moving a cast and crew run at a perennial near-half-off discount. A one-off credit bump cannot compete with that recurring cost gap.
- California film credit: up to 45% of qualified spend.
- Georgia credit cap: 30%, but cost of living is 39% lower.
- After the summer 2025 doubling, Los Angeles shoot days are down 23%.
- New York’s spend rose 87% and it hosted more live-action features than California last quarter.
The evidence is not subtle
A Tulane study by Patrick Button found state film incentives produced an average of about 1.5 new TV series per state and had, he concluded, “no meaningful effect on jobs in the film industry or related industries.” In practice, credits often subsidise productions that would have shot in the state anyway, while tax revenue that could have gone to schools, roads and hospitals is refunded.
What operators should do
For producers and media planners, the takeaway is to compare full location cost: headline rebate, cost of living, crew depth, housing, logistics and talent travel. A 45% credit on a high-cost base can lose to a 30% credit on a 39%-cheaper base. California’s problem is structural affordability, and another ceiling increase mostly rewards projects that never planned to leave.
Newsom said the state created the modern entertainment industry and intends to keep it. The data suggests that keeping it will require fixing costs, not firing blanks at the credit ceiling.
Source: The Hollywood Reporter
