LOS ANGELES — For years, the soundstages that built the American film industry have sat dark more often than studio executives care to admit. Productions that once filmed almost exclusively in Los Angeles now shoot in Atlanta, Albuquerque, Toronto and Budapest, chasing tax incentives California couldn't match. This year, the state moved to change that math.
Related: NORTH HOLLYWOOD WAREHOUSE HOLDS A CENTURY OF FILM COSTUME HISTORY, STILL ON THE CLOCK · The Unglamorous Art of Making Hollywood Sound Like Anywhere But Hollywood
Gov. Gavin Newsom signed a budget that more than doubles California's film and television tax credit program, raising the annual cap from $330 million to $750 million. The increase, one of the largest single expansions of a state production incentive in the country's history, reflects growing alarm in Sacramento and in Hollywood over what industry groups have long called "runaway production."
The term describes a trend building since the early 2000s, when states like Louisiana, Georgia and New Mexico began offering aggressive tax breaks to lure film and TV work away from California. Canada and the United Kingdom followed with their own incentives, backed by favorable exchange rates that made shooting abroad even cheaper for U.S. studios. The result, according to entertainment industry trade reporting, has been a steady decline in production days logged in Los Angeles County over the past two decades, even as overall content spending by streaming services and studios has grown.
FilmLA, the nonprofit that coordinates permits for on-location filming in the Los Angeles area, has tracked much of that decline. Its data has repeatedly shown production activity in the region falling well below pre-pandemic levels, with feature film shoots in particular migrating to jurisdictions offering credits of 25% to 30% or more of qualified spending. California's previous program, capped at $330 million a year, had become one of the less generous options among major filming destinations, despite the state's unmatched depth of crew talent, equipment vendors and post-production infrastructure.
The expanded program raises the credit rate for qualifying productions and broadens eligibility to include large-scale competitive series and other formats previously excluded, according to details released alongside the budget signing. State officials and entertainment industry advocates framed the move as necessary to protect not just star-driven productions but the much larger ecosystem of below-the-line workers: grips, electricians, costumers, caterers, drivers, whose livelihoods depend on sustained local production volume.
That workforce has been under particular strain. The industry endured a prolonged slowdown following the 2023 strikes by the Writers Guild of America and SAG-AFTRA, which halted production for months and left thousands of crew members without steady work even after contracts were settled. Streaming services have since pulled back on overall content spending compared with the peak years of the so-called streaming wars, compounding the loss of work that had already shifted out of state. Local unions representing camera operators, editors and other crafts have pointed to the tax credit expansion as a needed counterweight, though they've also cautioned that incentives alone won't fully restore production levels to where they stood a decade ago.
California's film tax credit program dates back to 2009, when the state first introduced incentives in response to the earliest wave of runaway production. It has been renewed and modestly expanded several times since, but this year's increase is a shift in scale rather than a routine extension. Supporters argue the credit pays for itself by keeping production spending, and the tax revenue, wages and vendor contracts that come with it, inside the state rather than exporting that economic activity elsewhere. Critics of tax incentive programs have questioned whether such credits represent sound fiscal policy compared with direct public investment, a debate that has played out in state legislatures nationwide as more governments compete for the same limited pool of productions.
For studios weighing where to shoot their next project, California now factors into the math in a way it may not have in recent years. Industry analysts have noted that proximity to studio executives, access to top-tier talent pools and the practical advantages of not relocating cast and crew for months at a time still favor Los Angeles when the financial gap with other locations narrows. Whether the expanded credit closes that gap enough to reverse years of production flight remains an open question. It'll likely take several production cycles to find out.
In the meantime, the physical landscape of the industry tells its own story. Soundstages across the San Fernando Valley and in cities like Culver City and Burbank have seen occupancy fluctuate along with the broader slowdown, while newer facilities have opened in Georgia and New Mexico built specifically to compete for work California once took for granted.