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Governor Gavin Newsom’s latest budgeting stumble has put California’s booming film and TV comeback at risk. A provision tucked into the state budget — in trailer bill SB 122 — appears to slap a corporate tax‑credit cap onto the newly expanded Film & Television Jobs Act (AB 1138). Lawmakers and studios say the move could strip away millions in incentives and scare productions out of California just as Program 4.0 was finally bringing jobs and spending back home.
What the budget language did — and why it matters
The budget trailer language extends a $5 million‑per‑company limit on business tax credits through 2029 and then phases in a permanent cap tied to a company’s state tax liability. In plain English: many big film and TV projects that expect tens of millions in credits could suddenly see those rewards cut in half or worse. That’s not a hypothetical — the California Film Commission says Program 4.0’s first year looked strong, with about $6.6 billion in direct production spending and roughly 35,000 cast and crew jobs. Burdening that program with a corporate credit cap would undercut the very reason lawmakers doubled the program last year.
Lawmakers and the industry are screaming for a fix
More than three dozen state legislators have signed a formal letter to Governor Gavin Newsom, Senate President pro Tempore Monique Limón, and Assembly Speaker Robert Rivas asking for a narrow carve‑out or trailer‑bill correction. Assemblymember Rick Chavez Zbur — a co‑author of AB 1138 — called the change an apparent oversight that “effectively kneecapped” the work to bring productions back. The studios, unions and the Film Commission are watching closely because uncertainty alone can push shoots to greener states or other countries that already offer predictable, uncapped incentives.
Was this a mistake or a budget tradeoff?
The administration says the cap language is part of a broader fiscal plan to be careful with state spending and keep long‑term balance. Fair enough — except when “fiscal caution” looks like burying a one‑sentence exemption in a giant budget so that Hollywood loses out. If this was intentional, it’s a bait‑and‑switch on the middle‑class jobs the expansion promised. If it was accidental, it’s a rookie drafting error with real consequences. Either way, the simple, obvious fix is a one‑line carve‑out to keep film credits exempt from the corporate cap.
Fix it fast — before the jobs walk
California cannot afford to play bureaucratic games while productions make business decisions in real time. The state just started to win back work and paychecks after years of productions fleeing for friendlier tax climates. Governor Newsom should stop the spin, sign a short trailer bill or instruct the administration to get this fixed immediately, and spare California another self‑inflicted hit to jobs, spending and its reputation. Anything less would be a political comedy nobody wants to watch — except maybe lawmakers who enjoy watching their own mistakes on repeat.
