How Many Jobs Will California Film Credit Expansion Create?

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California legislators frequently refer to the broadening of the film and TV tax credit as a “job creation measure.

However, has anyone managed to provide an answer to the question of how many positions this project might generate? Additionally, is it possible that this could be sufficient to counteract the significant decline we’ve seen lately? Few have ventured to address these points.

As suggested by the California Film Commission, who administers the program, boosting the credit to $750 million is estimated to lead to a 40-50% rise in direct job creation, equating to approximately 4,400 to 5,500 jobs.

Or more casually:

The California Film Commission says that if we bump up the credit to $750 million, it could mean around 4,400 to 5,500 new jobs, representing a significant increase in direct employment!

The loss of jobs in California over the past few years, as indicated by both federal and industry statistics, is much more extensive than what you’re seeing now.

Alex Aguilar, business manager of Laborers Local 724, confidently stated that the program’s expansion would undeniably revive jobs. However, he cautioned that it might not return exactly as it was previously.

Approximately 17,000 jobs in Hollywood are estimated to have disappeared since 2022, according to data from the Motion Picture Industry Pension and Health Plan. However, this figure doesn’t include workers who don’t meet the criteria for that particular plan.

2024 saw a significant decline in employment within California’s motion picture and video production sector, with approximately 40,000 jobs lost compared to the peak in 2022. This represents roughly 20,000 fewer jobs than pre-pandemic levels. Moreover, some entertainment unions have reported that between 40% and 50% of their members are currently unemployed.

Rick Chavez Zbur, the Los Angeles assemblyman spearheading the expansion of the tax credit, stated that we’re dealing with job losses similar to those during the Depression. He clarified that this isn’t a magic solution, but it will help slow down the rapid decline in jobs and potentially bring some positions back.

Despite its reduced size, Hollywood remains enormous, and California only partially funds it. The existing $330 million initiative supports approximately 11,000 acting and technical roles annually, as stated by the commission. This equates to roughly one out of every nine production jobs in the state. If the program were to be doubled, the majority of the industry would remain unaffected.

Based on the commission’s report, the expansion won’t actually double the number of jobs the program generates. This is partly because the law proposes to raise the base credit for productions from 20% to 35%. Therefore, big projects such as “Top Gun: Maverick” or “Rebel Moon” would receive $35 million instead of $20 million. However, this increase in funding doesn’t necessarily create additional jobs.

This type of analysis can be just as much about creativity as it is about hard facts, particularly when considering the far-reaching impacts of job creation on the wider economic landscape.

As I delve into the findings of the report released on May 27th by the Milken Institute, it’s clear that taking this multiplier into account could potentially lead to an additional 14,886 jobs being created in my perspective.

However, the assertion you’ve made is being challenged. In February, the Legislative Analyst’s Office in the state found no strong evidence to suggest that movie tax credits contribute positively to the overall size of the economy. Instead, they proposed that these film incentives might displace other economic activities.

According to Christopher Thornberg, founder of Beacon Economics, it’s challenging to definitively assert that the jobs sustained by the program wouldn’t have been available in its absence.

Thornberg points out the need to discuss ‘conditional’ jobs, meaning those that would not exist without the subsidy. He explains that stating ‘this subsidy is linked to this job’ does not provide much insight.

Thornberg contends that the California Film Commission may be exaggerating the influence of its work. On the other hand, Kevin Klowden, the author of the Milken report, opines that the commission could actually be underestimating its impact.

“They’re massively underselling it,” he says.

Additionally, Klowden and Thornberg hold differing opinions regarding the fundamental reasons behind the decline in Hollywood’s prosperity. According to Klowden’s analysis, escalating expenses in Los Angeles are the main culprit, with rising living costs, healthcare premiums, and permit charges being significant contributors to this issue.

According to Thornberg’s perspective, technological advancements have significantly altered the manner in which people enjoy entertainment. This transformation is evident in the growing preference for YouTube over conventional platforms, causing a noticeable dip in global entertainment consumption levels.

“I think the industry has a problem,” he says. “It isn’t that California is too expensive.”

Despite the reason behind the economic decline, California is currently engaged in a competitive battle for the jobs that are still available. Reports indicate that New York and Georgia offer approximately $60,000 per job, whereas California offers around $30,000. This figure could increase to between $45,000 and $48,000 once expansion occurs.

As a dedicated cinephile, I’ve noticed that numerous productions tend to overlook applying for California tax credits due to their limitations. However, I firmly believe that boosting the payout could entice more high-budget movies – ones that generate countless jobs – which might otherwise opt for foreign lands.

He expressed his preference for a bigger credit, but acknowledged that they must work within the bounds of what is politically feasible given our current resources.

The Entertainment Union Coalition contends that this bill could prevent further decline in the current workforce, as without it, the situation might worsen. The coalition predicts that the expansion could generate an extra 400,000 to 500,000 working days. According to EbMaster’s estimate (which the coalition doesn’t necessarily endorse), this equates to around 10-15% of the total jobs lost over the past two years.

Rebecca Rhine, head of the coalition and an executive at the Directors Guild of America, stated that while additional resources can lead to increased employment opportunities, we understand the current complexities and other pressing matters. However, immediate action is crucial, and we should not let striving for perfection hinder us from taking good steps forward.

Last year, Greg Bartlett, serving as a unit production manager, played a significant role in establishing CA United, an organization with the goal of advocating for an expansion of the state’s program up to a value of $1 billion.

He remarked, “This might still not be sufficient to halt it now, but I acknowledge the effort towards increasing the budget to $750 million.” He continued, “It’s a small step, coming in late, and it should be larger. However, every little bit counts.

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2025-06-03 19:48