California’s Post-Production Rescue Plan: A Tax Credit Too Little, Too Late?

California’s post-production industry has been hemorrhaging jobs for two decades, with over 1,800 positions lost since 2000. Governor Gavin Newsom has signed a bill creating a $10 million tax credit aimed at keeping these high-paying jobs in-state.

The industry employs around 12,000 people in California, but its numbers have been dwindling due to the state’s restrictive film and TV tax credit. Currently, only projects that spend at least 75% of their budget within the state are eligible for subsidies. The new tax credit would allow productions to film elsewhere while still receiving a subsidy for editing and VFX work done in-state.

Supporters point out that other countries and states have standalone tax incentives for post-production, such as the UK, Canada, Australia, Spain, New York, New Mexico, and New Jersey. California’s overall film and TV tax credit was increased to $750 million last year, but this new measure is a step in the right direction.

The VFX industry remains largely non-union, which has been a major hurdle in getting support from state lawmakers. The bill was amended to require 85% of the funding go to union-level wages and benefits, which could help mitigate this issue.

However, it’s unclear whether this will be enough to stem the tide of job losses. California’s post-production industry has been struggling for far too long, and a modest $10 million tax credit may not be sufficient to address its needs.

The fact that such a small credit was hailed as a “historic day” by Motion Picture Editors Guild National Executive Director Scott George says more about the state’s failure to support this sector than it does about the credit itself. When high-paying jobs in creative industries like film and TV editing leave the state, they often take their skills and expertise with them.

This can have a ripple effect on the local economy, as well as on the types of projects that get produced in-state. The signing of SB 186 is also worth noting, which addresses concerns about the $5 million cap on corporate tax credits for films. While this measure doesn’t go far enough to address industry demands, it’s a step in the right direction.

As productions continue to leave California altogether, with states like Georgia and New Mexico offering increasingly attractive packages, it’s only a matter of time before we see even more projects making their way to other parts of the country. It’s up to California’s politicians to get serious about supporting its post-production industry – or risk watching this vital sector disappear from their state forever.

The $10 million tax credit may be a start, but it’s just that – a start. To truly save California’s post-production industry, the state will need to take bold action and think outside the box. Anything less will only lead to more job losses and a continued decline of this vital sector.