California, feds push film tax credits as Hollywood seeks to retain production jobs

California and the federal government are moving in tandem to shore up the state's entertainment industry, which has watched productions migrate to cheaper jurisdictions for years. On Wednesday, Governor Gavin Newsom announced a suite of new incentives: an expanded film and television tax credit, a fresh post-production tax credit, and protections for performers against unauthorized use of their likenesses in AI-generated content. The moves signal a deliberate effort to reverse the brain drain that has sent filmmakers to Georgia, Puerto Rico, Serbia, and across Europe in search of better financial terms.

The timing matters. Paramount Pictures recently committed to keeping operations in Los Angeles, a symbolic win that has lifted spirits in an industry that has felt increasingly precarious. Newsom framed the incentives not as a subsidy but as an investment in California's future, emphasizing that the state remains "the home of entertainment." The California Film Commission reports that 35 projects—28 of them independent films—have already received production incentives, with the slate expected to generate more than $1 billion in direct spending. The projects include the sequel to Lionsgate's 2026 hit "Michael" and a new Pixar film.

At the federal level, a bipartisan coalition is pushing legislation that would create a national film and television tax credit. The bill is expected to be introduced in Congress in early November, with lawmakers aiming for passage by December 11, before the current session ends. If approved, the credit would take effect in 2027 and could be layered on top of state incentives. The legislation has an unusual coalition behind it: President Donald Trump championed it, and Senator Adam Schiff, a Democrat who led the first impeachment effort against Trump, has publicly backed it. Schiff called it an immediate priority, saying Congress should "take up and pass a federal film tax incentive to bring back these good-paying jobs that we've lost to other countries."

Paul Kampf, a filmmaker with three decades in the industry, sees the incentives as meaningful but incomplete. He has produced four feature films and a documentary abroad, and is currently working on his sixth project, titled "Harvest," in Serbia. His experience illustrates the stakes: a company owned by the Serbian government released one of his films in Eastern Europe without permission, a situation he attributes partly to the lack of incentive for American filmmakers to stay home. Kampf told Fox News Digital that the post-production credit is particularly valuable because it allows filmmakers to shoot anywhere but bring finishing work back to California, preserving jobs in editing, sound design, visual effects, and color correction—work that independent producers especially rely on.

Kampf's broader critique is that California had grown complacent, assuming its dominance was permanent. "Hollywood needs a facelift," he said, describing the industry as having lost its sense of vitality and investment. He acknowledged the lifestyle and tax burdens of living and working in California, but argued that the new incentives represent a genuine shift in posture. He called the federal tax credit proposal "maybe the best bipartisan entertainment bill" he has seen in a decade, suggesting that the convergence of state and federal action might actually move the needle against global competition. What remains to be seen is whether these incentives will be enough to reverse years of outflow, or whether they represent merely a temporary stabilization of an industry that has already begun its migration elsewhere.