California Governor Gavin Newsom has officially signed into law a new measure that establishes a $10 million tax credit aimed at preventing the migration of post-production jobs to other states and even overseas. This initiative comes as part of a broader effort to bolster the state’s film and television industry, which has seen significant job losses over the past two decades.
Legislative Backing and Support
The bill, known as AB 2319, passed both the state Assembly and Senate last month with substantial bipartisan support. While proponents, including the Motion Picture Editors Guild, initially sought a more ambitious credit of $100 million, they celebrated the $10 million allocation as a positive first step towards preserving California’s standing as a hub for post-production work.
Impact on the Post-Production Industry
Scott George, the national executive director of the Editors Guild, proclaimed the signing a “historic day,” highlighting that the new credit would incentivize productions shooting outside of California to return for post-production work, thereby providing job opportunities for guild members. Similarly, the California Post Alliance, a coalition of post-production facilities, actively advocated for the bill, emphasizing California’s need to compete with countries that offer robust post-production tax incentives.
Comparison to Existing Credits and Challenges Faced
California had already increased its film and television tax credit to $750 million last year, which includes post-production costs contingent upon spending 75% of a project’s budget in the state. The newly established tax credit will provide flexibility, allowing productions to shoot in other locations while still benefiting from essential subsidies for in-state editing and visual effects work.
One of the significant hurdles to passing the bill stemmed from the largely non-union nature of the visual effects industry, which raised concerns among state lawmakers about the potential undermining of union labor. As a resolution, the legislation was amended to stipulate that a minimum of 85% of the funding must be allocated to jobs offering union-level wages and benefits.
Advocating for California’s Entertainment Industry
Assemblyman Nick Schultz, a Democrat from Burbank who championed the bill, stated that the post-production sector currently employs approximately 12,000 individuals in California, though it has seen a loss of 1,874 jobs over the last 20 years. Schultz expressed optimism, declaring, “This is a big victory in our fight to save California’s entertainment industry, and we’re just getting started.”
Additional Legislative Measures
In conjunction with the post-production tax credit, Governor Newsom also signed SB 186, which addresses critical tax issues within the film industry. This measure exempts independent films from the current $5 million cap on corporate tax credits and allows studios to accelerate the payback period on refundable tax credits from five years to just two. Additionally, it extends the expiration timeframe for old, non-refundable tax credits from nine years to 15 years. Despite the industry’s push for a full exemption, the cap remains in place.
