LOS ANGELES – California’s film and TV tax credit expansion, hailed as a “jobs bill,” raises questions about its true impact on employment.
California lawmakers have long promoted the expansion of the film and TV tax credit as a mechanism to boost employment. However, the extent of its impact remains a topic of debate. The California Film Commission, which manages the program, predicts that increasing the credit to $750 million could boost direct employment by 40-50%, translating to approximately 4,400 to 5,500 new jobs.
Immediate Impact
This projected growth represents only a fraction of the jobs lost in California’s entertainment sector over recent years. Federal and industry data highlight a significant downturn, with Hollywood unions estimating a loss of 17,000 jobs since 2022, based on the Motion Picture Industry Pension and Health Plan data.
California lost about 40,000 jobs in motion picture and video production in 2024 compared to the peak in 2022.
Key Details Emerge
Industry experts, including Alex Aguilar, business manager of Laborers Local 724, acknowledge the positive impact of the expansion but remain cautious. “It will definitely bring jobs back,” Aguilar stated, “but it may not restore the industry to its former glory.”
Rick Chavez Zbur, the Los Angeles assemblyman spearheading the tax credit expansion, emphasizes its necessity. “This is not a panacea,” Zbur remarked, “but it will stem the steep slide in jobs and bring some of them back.”
Industry Response
Despite its potential, the expansion faces skepticism. According to the Legislative Analyst’s Office, there is “no compelling evidence” that film tax credits positively impact the state’s economy overall, suggesting that they may displace other economic activities.
Christopher Thornberg, founding partner of Beacon Economics, warns that the California Film Commission might overstate the job impact. “We have to talk about ‘but-for’ jobs,” Thornberg explained. “Simply attaching a subsidy to a job doesn’t provide a complete picture.”
“Even in its diminished state, Hollywood is massive, and California subsidizes only a portion of it.”
By the Numbers
Currently, the $330 million program supports 11,000 cast and crew jobs annually, approximately one in every nine production jobs in the state. However, the expansion will not double the number of supported jobs due to an increase in the base credit for productions from 20% to 35%.
The Milken Institute study estimates an extra 14,886 jobs when considering the “ripple effect” across the broader economy.
What Comes Next
As California competes with New York and Georgia, which offer $60,000 per job compared to California’s $30,000, the expansion aims to attract big-budget films that might otherwise look abroad. Zbur advocates for a larger credit, acknowledging political constraints. “We must do what is politically achievable now,” he said.
The Entertainment Union Coalition supports the bill, estimating it will result in 400,000 to 500,000 additional workdays, addressing about 10-15% of the total job loss in recent years.
Expert Analysis
Kevin Klowden, the Milken report’s author, argues that costs in Los Angeles, including living expenses and permit fees, are primary factors in Hollywood’s downturn. Thornberg, however, attributes the decline to technological shifts in entertainment consumption.
“The industry has a problem,” Thornberg commented, “and it’s not necessarily that California is too expensive.”
Regional Implications
California now finds itself in a bidding war for remaining jobs. Greg Bartlett, a unit production manager and founder of CA United, advocates for increasing the program to $1 billion. “It’s a little, and it’s late, but anything helps,” Bartlett noted.
Rebecca Rhine, president of the Entertainment Union Coalition, stresses the urgency of action. “We cannot let the perfect be the enemy of the good,” she stated, highlighting the need to retain the existing workforce.
As California navigates these challenges, the expansion represents a significant step towards stabilizing the state’s storied entertainment industry, albeit with ongoing debates about its long-term efficacy.
