Gov. Gavin Newsom has signed a measure to create a $10 million tax credit meant to stem the tide of post-production jobs to other states and overseas.
The bill, AB 2319, passed the state Assembly and Senate last month by wide margins. Supporters, including the Motion Picture Editors Guild, had pushed for a credit that would be tenfold larger — $100 million — but see the more modest allocation as a positive first step.
Scott George, the guild’s national executive director, called the signing a “historic day” and said the credit will ensure that “even projects shooting outside of our state can come back to California to employ Editors Guild members in post-production.”
The California Post Alliance, a coalition of post-production facilities, also campaigned strongly for the bill. Supporters have noted that many countries — including the U.K., Canada, Australia and Spain — have standalone tax incentives for post-production, as do several other U.S. states, including New York, New Mexico and New Jersey.
California, meanwhile, increased its film and TV tax credit to $750 million last year. That credit covers post-production costs, but only if 75% of the project’s overall budget is spent in California. The new credit would allow productions to film elsewhere but still get a subsidy for in-state editing and VFX work.
One of the challenges in getting the bill passed is that the VFX industry remains largely non-union, and state lawmakers are typically unwilling to subsidize jobs that could undercut union labor. The bill was amended in May to require that 85% of the funding go to jobs with union-level wages and benefits.
Assemblyman Nick Schultz, D-Burbank, led the effort in the Legislature. According to his office, the post-production industry employs about 12,000 people in the state, but has lost 1,874 jobs over the last 20 years.
“This is a big victory in our fight to save California’s entertainment industry, and we’re just getting started,” Schultz said.
Newsom also signed SB 186, which addresses the film industry’s concerns about the state’s $5 million cap on corporate tax credits. The measure exempts independent films from the cap, and allows studios to accelerate the payback period on refundable tax credits from five years to two years. The measure also extends the expiration date on old, non-refundable tax credits from nine years to 15 years.
The industry had pushed for a complete exemption for film tax credits from the cap, but did not get that.