Gavin Newsom pitches $1B Hollywood tax breaks, credits for actors’ salaries

California Gov. Gavin Newsom wants to shower Hollywood with at least $1 billion in annual tax credits — including new breaks for productions covering movie stars’ salaries.

Newsom, who has just two months left in office, proposed boosting California’s film and television tax credits Monday, making another costly push to keep Hollywood productions in the state.

The Democrat wants to go beyond the $750 million annual program he secured last year, expanding eligibility to include movie stars’ salaries and extending the incentives through 2040 — long after his likely successor, Xavier Becerra, takes over.

The proposal would allow qualifying productions to claim credits for so-called above-the-line compensation, including pay for actors, directors, writers and producers. The tax benefits would be subject to caps.

“California created the modern entertainment industry; we’re the capital of entertainment and we’re going to keep it here,” Newsom said in a statement Monday.

The governor said the proposal is designed to “maintain the momentum” of last year’s tax credit expansion, and he reiterated his call for Congress to pass the Motion Picture, Television, and Entertainment Revitalization Act, saying that “states can’t shoulder the cost alone.”

Newsom initially proposed increasing the annual allocation from $330 million to $750 million in October 2024. He and lawmakers delivered that expansion last year, more than doubling the available credits.

A Los Angeles County report released this August said California had lost 52,016 film and television jobs since 2022, nearly all in Los Angeles County.

Warnings that Hollywood could become the next Detroit intensified in the spring of 2025, as Los Angeles-area on-location production fell 22.4% in the first quarter compared with a year earlier.

California’s share of U.S. post-production employment fell from approximately 53% to 42% between 2005 and 2025, according to a state Assembly analysis. The analysis said the sector employed more than 12,000 workers statewide.

Newsom also signed legislation in September creating California’s first standalone post-production tax credit, offering producers credits worth 35% to 50% of qualifying in-state spending on editing, sound, music, visual effects and finishing — even for projects filmed elsewhere.

His latest proposal would set aside $100 million annually for independent films, up from $74 million, and offer a 5% credit boost to companies committing to at least two distinct qualifying California productions.

Newsom’s office argues the expanded credits are helping reverse the slide, citing $8.25 billion in direct production spending and more than 43,000 cast and crew jobs associated with participating projects.

The governor’s efforts to expand the state’s film and TV tax credits have been met with endorsements from celebrities whose projects received credits.

In a May press release from the governor’s office, comedian Will Ferrell said he was honored that his film “Self Help” had been selected for the tax credit program.

Snoop Dogg thanked Newsom and the California Film Commission for supporting his biopic.

“Y’all making it possible for us to tell my story right here where it all began,” he said.

Jimmy Kimmel also celebrated credits awarded to “SCHOOLED!,” the educational competition series he executive produces. Newsom appeared on Kimmel’s ABC late-night show just last Wednesday for an at-times awkward lovefest ahead of the midterm elections.

Ben Affleck offered his endorsement of California’s efforts to retain Hollywood productions back in July, citing tax credits for helping to support “Argo,” “Unstoppable” and “Accountant 2,” along with his upcoming film “Gingerbread Men.”

Newsom’s efforts to help Hollywood have not come without stumbles. Last year, he signed a corporate tax-credit cap that undercut the very film incentives he was trying to expand, requiring a legislative fix.

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