California lawmakers opened debate Thursday on whether to remove the cap from the state’s $750 million film and TV production incentive — a move industry advocates say is overdue and legislators concede will be a “heavy lift” in a tight budget year.
The hearing, held in North Hollywood, put a familiar title to the cost of California’s current rules. A planned “Grey’s Anatomy” spinoff set in West Texas wanted to shoot in Santa Clarita but did not score high enough on the state’s jobs-ratio ranking. When ABC tried again in the fall, the program was oversubscribed and no longer taking applications.
“We lost a lot of time, and a lot of money, and now we are filming in Albuquerque,” Betsy Beers, creative partner of Shonda Rhimes, told the committee. “We want to be here.”
Why the cap is under pressure
Because California’s incentive is capped, projects apply in periodic windows and compete against one another. Motion Picture Association vice president Arlen Valdivia said the system “is still not competitive or predictable enough to address the loss of production to other regions.”
California doubled down last year, lifting the base credit from 20% to 35% and the overall cap from $330 million to $750 million. Lawmakers also added a $10 million post-production incentive and exempted independent film credits from a $5 million cap. Still, the outflow continues.
FilmLA reported last week that Los Angeles production volume keeps falling, even though the share of scripted TV shows receiving a state subsidy has nearly doubled. Georgia has no cap on its credit; New York can effectively pull from future years, creating uncapped-like certainty.
The numbers are the fight
California is also managing a structural deficit and deep Medicaid cuts, so expansion has to be sold as a return, not a cost. Committee chair Rick Chavez Zbur floated “dynamic scoring” — a way to count the economic benefit of the credit rather than just the headline expense.
On that measure, the room split:
- 20–50 cents: research cited by Legislative Analyst’s Office economist Rowan Isaaks for every dollar the state invests.
- $1.07: the return to state and local coffers claimed by Los Angeles Economic Development Committee research funded by the MPA.
Isaaks also warned that a higher credit rate does not automatically mean more production: “The higher credit might mean fewer projects overall.”
What’s on the table
Zbur said he wants to raise or eliminate the cap in the next legislative session. Other options floated include extending the 2030 sunset, subsidizing above-the-line costs such as actors and directors, and opening eligibility to commercials and game shows.
Teamsters leader Lindsay Dougherty cautioned that a proposed 20% federal incentive would not automatically bring work back: “We should not assume the work will return because federal policy changes.”
For entertainment marketers and media planners, the signal is that California remains a volatile location variable. Productions are already pricing that uncertainty into shoot decisions; the next session will determine whether Sacramento narrows that gap or leaves the uncapped states to win by default.
Source: Variety
