Over the past three years, an estimated 51,000 jobs tied to film and TV production have vanished, most of them in Los Angeles, a collapse that has rattled a state already bleeding businesses and residents under progressive governance. According to The Post Millennial, the downturn has prompted a scramble among gubernatorial hopefuls to retool California’s $750 million production tax credit program, with several contenders arguing that the state must compete more aggressively with red and purple states that have embraced pro-business policies.
San Jose Mayor Matt Mahan has called for eliminating the cap on the program entirely and broadening subsidies to cover “above the line” expenses, including salaries for actors and producers. “Hollywood is the centerpiece of the California economy,” Mahan told Variety, warning that “We’ve got a tremendous number of middle class jobs at stake in an industry that is suffering. We are down 35% from our 2022 peak.”
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Mahan bluntly acknowledged that California’s high-tax, high-regulation model is losing ground to more business-friendly jurisdictions, stating, “The reality is that other states and countries are doing more to attract this industry. We can’t lose Hollywood.” Former Los Angeles Mayor and Democrat gubernatorial candidate Antonio Villaraigosa has echoed the call for more generous incentives, conceding, “We haven’t done enough,” and adding, “I believe this election is existential for the film industry. They’re not going to film here — not when the rest of the world and other states are staying above and below the line.”
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The current tax credit program was previously expanded by Gov. Gavin Newsom, who boosted funding, made the credits refundable, and extended eligibility to animation and competition shows. Yet despite these moves, production has continued to slide, underscoring the limits of simply throwing taxpayer money at an industry while broader cost-of-living and regulatory burdens remain unaddressed.
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Industry stakeholders are split over how any new incentives should be structured, reflecting deeper tensions between labor and corporate interests. Unions generally favor concentrating subsidies on below-the-line costs to protect crew jobs, while studios insist that including higher-paid talent is essential to compete with states like Georgia and New York that have aggressively courted production.
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Recent figures highlight how few projects actually benefit from the state’s largesse, with only about 11 percent of television productions and 17 percent of films in Los Angeles qualifying for credits in late 2025. That limited reach raises questions about whether Sacramento’s approach is more about political optics than about creating a broad-based, free-market environment where the industry can thrive without perpetual subsidies.
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Other candidates have struck a more cautious tone, including former Rep. Katie Porter, who has said she wants to review the existing program before endorsing any expansion. “If we are hitting the limit of what we have allocated and we are seeing more potential, we should go back and not let the cap stand in our way,” she said, adding, “I’m not afraid to raise the cap if we’re seeing really good take-up.”
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As California weighs whether to deepen its reliance on targeted tax breaks, voters are left to decide whether the state should double down on interventionist policies or embrace a broader conservative course correction that lowers taxes, trims regulation, and restores the competitive edge that once made Hollywood—and California itself—the undisputed capital of American opportunity.
