Gov. Gavin Newsom proposed an extension to California’s existing film and television tax credit program.

In October, Newsom announced a proposal to expand California’s film and television tax credit program to $750 million. The tax credit program provides rebates for eligible productions that are produced in California.

The program, created in 2009, has generated $26 billion in economic activity and supported more than 197,000 cast and crew jobs in California, according to the press release.

In the past two decades, many states have begun providing production companies with tax incentives, encouraging them to move production to different regions – states such as New Mexico and Georgia are offering at least 20% in tax rebates, according to states’ respective tax incentive sites.

If approved, California’s available tax incentives will increase from $350 million to $750 million, and California would offer one of the highest rebates in the nation, according to the press release. With the extension, film productions will be able to save up to $750 million dollars on their taxes, under certain conditions.

“California is the entertainment capital of the world, rooted in decades of creativity, innovation and unparalleled talent,” Newsom said in the press release. “Expanding this program will help keep production here at home, generate thousands of good-paying jobs and strengthen the vital link between our communities and the state’s iconic film and TV industry.”

Kerri Wood Einertson, the executive director of government affairs and public policy at the Screen Actors Guild-American Federation of Television and Radio Artists – a union representing film industry workers – said it is important to consider the effects of the tax credit program beyond the entertainment industry.

Wood Einertson said money spent on production trickles down to other local industries, including restaurants, hotels and dry cleaners.

“It is not just about the people working in the entertainment industry,” Wood Einertson said. “It’s about the whole community and how productions really, really drive up that economy.”

George Huang, a screenwriter and professor at UCLA’s School of Theater, Film and Television, said the growing talent of crews in other states and countries – such as Germany, Canada and Mexico – has taken away Hollywood’s status of having the most proficient and accomplished crews, luring production companies to those regions.

Huang also said that in the past, countries developed their own regional cinematic styles, but have now developed their techniques and now compete with Hollywood’s level.

“Every country has had their own regional cinema for the longest time,” Huang said. “But they’re now developing crews that can be on-par with a Hollywood crew, which has always been regarded as the ‘crème de la crème’ of the industry.”

Tom Nunan, an Academy Award-winning film producer and lecturer at TFT, said the current rebates primarily benefit high-budget films and television shows, often discouraging producers, writers and actors on smaller films.

71% of films rejected from the tax credit moved to alternate locations, contributing to California’s economic losses, according to Newsom’s press release.

Nunan said that he chose to shoot a film set in Lake Tahoe in Spain because they were unable to get a rebate.

“Like most states and municipalities, the rebates are designed to generate publicity for that state, and if possible, greater employment,” Nunan said. “But if the state of California continues to only award those mega-budgeted projects, there’s only a handful of crews that are working on those projects versus dozens or more that are lower-budgeted projects that would employ many more people.”

However, critics argue that the tax extension program deters funds from more pressing issues in California, such as education, housing and healthcare, arguing that not all communities benefit from this program, according to the LA Times.

The program is set to commence July 1, 2025.

Wood Einertson said that the entertainment industry’s home is in California, and it should remain that way.

“What I see the tax credit program doing is providing more opportunities for our members to work in the state, and that’s the most important thing,” she said.