Hollywood’s production Crisis: Can California’s Tax Credits Save the Industry?
Los Angeles, CA-The entertainment industry in California is facing a notable downturn, prompting concerns about it’s future and the livelihoods of those who depend on it. The situation, described by one expert as a triage situation
, has many wondering if the state can revive its once-dominant film and television production sector.
The Downturn: A Perfect Storm
several factors have converged to create the current crisis:
- Strikes: The 2023 strikes by Hollywood writers and actors brought production to a standstill.
- Job Losses: California lost approximately 40,000 film and television jobs in 2023 alone, according to the U.S. Bureau of Labour Statistics.
- Production decline: Television production in the greater Los Angeles area has plummeted by 58% since its peak in 2021, according to FilmLA.
- Decreased Shoot Days: the number of shoot days for television fell from 18,560 in 2021 to 7,716 in 2024.
- On-Location Decline: in the first quarter of 2025, on-location production in L.A. declined by 22.4% compared to the same period last year, according to FilmLA.
the Human Cost
For many in the industry, the decline has had a devastating impact. Phil Mangano, a film and television editor who once enjoyed consistent work, is now struggling to make ends meet. It was just job after job after job…Very consistent work,
mangano said, reflecting on his past success. However, the current reality is starkly different. When that finally settled,we where like,OK,great,things will come back. And there has been no significant increase in job opportunities.
Mangano’s situation is not unique. Facing dwindling savings, he has even applied for a job at Costco. I applied for a job at Costco a couple months ago,
he revealed, adding that he cannot hold out much longer.
The uncertainty is palpable as he contemplates the future: I have a little savings left. We’re hoping that’ll float us for a few more months.And then we have to start making some hard decisions…Whether or not we can keep the house.
the Lure of Tax Incentives
Matthew Belloni,who covers show business for Puck News and hosts the podcast “The Town,” points to the role of tax incentives in driving production away from California. Some European countries that are offering up to 40% back on these productions. And that’s incredibly influential,
Belloni explained.
The competition is fierce, with other U.S.states and international locations offering generous financial incentives to attract Hollywood productions. This has led to a significant outflow of jobs and investment from California.
California’s Response: A $750 Million Proposal
California Gov.gavin Newsom is proposing to more than double the state’s annual film and TV tax credits from $330 million to $750 million. Film and film making, pre and post-production, it’s on life support,
Newsom told reporters earlier this month. L.A.County and L.A. city are struggling.
The goal is to stop the bleeding
and revitalize the industry. However, some experts question whether the proposal is sufficient. The sad reality is that California has sat on this issue for 30 years,
Belloni said.
Belloni remains skeptical, unsure if california can provide enough tax credits to offset the high cost of working in the state. Other jurisdictions have done their own aggressive cuts to that bureaucracy. Is California willing to do that? Don’t know.
The Road Ahead
The future of Hollywood production in California remains uncertain.While the proposed tax credits offer a glimmer of hope, the state faces significant challenges in competing with other locations that offer more attractive financial incentives. For individuals like Phil Mangano, the situation is dire, with many forced to make tough decisions about their careers and livelihoods.
