This figure would be an increase from the current $330 million annual allocation to help the state stay at the top of film production, according to a press release. Newsom unveiled the proposal during a news conference Sunday at Raleigh Studios in Hollywood, joined by Los Angeles Democratic Mayor Karen Bass, as well as legislative leaders and union officials.

“We’re in a position where we can afford this, and we need to do this. It’s about recognizing the world we invented is now competing against us,” Newsom said behind a lectern with “Lights, Cameras, Jobs” written on it.

The proposal follows the 2023 SAG-AFTRA strike, during which thousands of industry workers went on strike for more than three months. The strike resulted in an estimated $5 billion nationwide loss in the entertainment industry, but writers and actors may have been in a worse economic position without it, according to a study from the University of Michigan.

If the proposal were to be approved by the state legislature, California would become the state that offers the most money to entice film productions out of any state, except for Georgia, which provides unlimited tax credits.

According to the press release, for every tax credit dollar approved, $24.40 in output, $16.14 in GDP, $8.60 in wages, and $1.07 in initial state and local tax revenue from production in the state were generated. Since the program began in 2009, it has generated over $26 billion in economic activity and supported more than 197,000 cast and crew jobs. 

Under Newsom’s proposal, tax credits will become refundable for the first time since the program’s inception.

When Bass was speaker of the California Assembly, she championed the original 2009 California Film & Television Tax Credit Program. She is supportive of expanding the incentive, which she said has been at the top of the priority list for entertainment industry leaders. 

“We have to do everything we can to strengthen and protect one of our foundational pillars in Los Angeles,” Bass said.

She added that Los Angeles “still has not recovered from the strike.”

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When asked about how this proposal would fit into California’s budget, which is set to be unveiled in January, Newsom said the state has had “good revenue news” and could afford to finance the extra cost of the program.

“I’m looking at other priorities and looking at areas where we want to continue to be more efficient and more effective,” Newsom said at the event. “I don’t want to pull back from that, but we can certainly provide the space for this.”