Staff Reports
Hollywood is running a slow-motion exodus and the latest debate shows why. An op‑ed this week argues the state should stop pretending it can keep big productions by only half‑playing the tax‑credit game. The call: expand credits so “above‑the‑line” pay — the stars, directors and top producers — can count toward film and TV tax breaks. That idea is getting louder because California raised the credit cap but left the most valuable costs out of the calculation.
California raised the cap — but left a big hole
Governor Gavin Newsom did sign a big boost to California’s film and TV tax credit program, lifting the annual pool toward roughly $750 million. Lawmakers and unions cheered that move as a way to keep work here and protect thousands of cast and crew jobs. But the program still largely excludes above‑the‑line costs. That matters. Big projects have huge pay checks for lead talent and directors. If those dollars don’t count, competing states like New York and Georgia — which do allow capped above‑the‑line treatment — look far more attractive to studios weighing where to shoot.
Letting stars qualify: smart economics, ugly headlines
Here’s the blunt truth: production decisions are math, not moral sermons. If including a capped share of star pay in a credit keeps a $100 million movie shooting in Los Angeles, local restaurants, set builders and union crews get paid. The op‑ed is right to press this point. Other jurisdictions have shown you can include above‑the‑line expenses while still controlling costs with per‑person caps and limits. That is how you compete without handing out blank checks to Hollywood’s highest earners.
Why critics are right — and how to fix it
Opponents will scream about subsidizing wealthy actors, and they’re partly right: optics are terrible if the policy looks like a celebrity windfall. Smart policy fixes that. Make above‑the‑line eligible only up to a clear cap per person. Require solid below‑the‑line hire guarantees. Use clawbacks if local spending targets are missed. Tie refunds to job metrics and local supplier use. Conservatives who hate giveaways can support a tight, accountable credit that actually produces real local work instead of paper wins for PR teams.
California can’t have it both ways — talk tough about saving Hollywood while keeping the rules so narrow that studios leave anyway. If the goal is jobs and local economic activity, expand the rules sensibly and attach hard guardrails. If lawmakers keep playing politics with the fine print, the production exodus will continue and the state will keep losing the very revenue and work it claims to want. That would be a shame, and not a little ironic, given how much the state has already spent to pretend otherwise.
