An Open Letter to Governor Newsom By Dave Puglia, President and CEO, Western Growers Dear Governor Newsom: We noted with great interest your proposal to extend California’s Film and Television Tax Credit Program and to further make the tax credits refundable for the first time ever. Bravo! As other states implemented their own tax
Since 2015, the California film and television tax credit has awarded $2.5 billion in tax credits. Private sector investment in California has been enormous, with 29 television series productions relocating to California and in-state expenditures of nearly $20 billion by those companies. Much of that spending supported good jobs in the entertainment industry, with 164,000 cast and crew hires attributed to the state’s tax credits. In announcing your proposal, the executive director of the California Film Commission said that it “continues to deliver on our goal of retaining and growing in-state production,” and that the refundable tax credit “will give industry decision makers more options and the certainty they need to make long- term investments here in the Golden State. This will translate into more production-related jobs, spending and opportunity.” By now you may be wondering why the leader of an agricultural trade association is going on and
incentives to lure film and television production away from California, your predecessors wisely recognized that as much as we want to believe that California’s special qualities would overpower those incentives, the hard reality is that money talks and, well, you know the rest. Governor Schwarzenegger won legislative approval of the first iteration of the program in 2009, with a modestly capped $100 million annual allocation and a sunset in just five years. Like you, Gov. Schwarzenegger faced skeptics who believed a tax credit like this should not be accommodated when the state was coping with a yawning budget deficit. (The state’s budget gap at that time was $42 billion, proportionately much higher than the challenge today.) The results proved the skeptics wrong as film and television production returned to California, spurring an increase of the allocation to $330 million annually along with other revisions.
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MAY | JUNE 2023
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