How Many Jobs Will California Film Credit Expansion Create?

California lawmakers have said many times that the expansion of the film and TV tax credit is a “jobs bill.”

But how many jobs will it create? And would it be enough to reverse the steep downturn in recent years? Few have attempted to answer those questions.

According to the California Film Commission, which oversees the program, hiking the credit to $750 million would result in a 40-50% increase in direct employment – or about 4,400 to 5,500 jobs.

That’s only a fraction of the job loss experienced in California in the last couple of years, according to federal and industry data.

“It will definitely bring jobs back,” said Alex Aguilar, business manager of Laborers Local 724, who has championed the expansion of the program. “I don’t know that it will be the way it was before.”

The Hollywood unions estimate that 17,000 jobs have evaporated since 2022, based on data from the Motion Picture Industry Pension and Health Plan. That’s not counting workers who don’t qualify for that plan.

According to the Bureau of Labor Statistics, California lost about 40,000 jobs in motion picture and video production in 2024 compared to the peak in 2022, or about 20,000 compared to pre-pandemic levels. Some entertainment unions report that about 40%-50% of their members are out of work.

“We know we’re facing Depression-era levels of job losses,” said Rick Chavez Zbur, the Los Angeles assemblyman who is leading the effort to expand the tax credit. “This is not a panacea. But it will stem the steep slide in jobs, and bring some of the jobs back.”

Even in its diminished state, Hollywood is massive, and California subsidizes only a portion of it. The current $330 million program supports 11,000 cast and crew jobs per year, according to the commission. That’s about one in every nine production jobs in the state. Doubling the program thus leaves most of the industry unaffected.

According to the commission, the expansion won’t even double the number of jobs the program supports. In part, that’s because the law would also increase the base credit for productions from 20% to 35%. So a major project like “Top Gun: Maverick” or “Rebel Moon” would get $35 million instead of $20 million — without creating any more jobs.

Such analysis can be as much an art as a science, especially when it comes to the “ripple effect” of jobs across the broader economy.

When that multiplier is taken into account, the expansion would result in an extra 14,886 jobs, according to a study issued May 27 by the Milken Institute.

But that claim is in dispute. In February, the state Legislative Analyst’s Office found “no compelling evidence to suggest that film tax credits have a positive effect on the size of the state’s economy overall.” The office argued that film incentives simply crowd out other activity.

It’s also hard to conclude, with certainty, that jobs directly supported by the program would not have existed without it, says Christopher Thornberg, founding partner of Beacon Economics.

“We have to talk about ‘but-for’ jobs,” Thornberg says. “That is: ‘But for this subsidy, this job wouldn’t be there.’ Simply saying ‘This subsidy is attached to this job’ doesn’t tell us a damn thing.”

Thornberg believes the California Film Commission is likely overstating its job impact. But Kevin Klowden, who authored the Milken report, believes the commission is being too conservative.

“They’re massively underselling it,” he says.

Klowden and Thornberg also disagree about the root causes of the Hollywood downturn. Klowden’s report argues the primary factor is spiraling costs in Los Angeles, including the cost of living, the cost of health insurance, and permit fees.

Thornberg argues that technology has changed the way people consume entertainment, as eyeballs shift to YouTube and away from traditional platforms, leading to a global decline.

“I think the industry has a problem,” he says. “It isn’t that California is too expensive.”

Regardless of the cause of the downturn, California is now in a bidding war for the jobs that remain. New York and Georgia pay about $60,000 per job, according to audit reports. California pays about $30,000, which would rise to $45,000-$48,000 after the expansion.

Since California tax credits are limited, many productions don’t bother to apply. Zbur argued that increasing the payout could attract more big-budget films – which employ lots of people – that would go abroad otherwise.

“I would like it to be a larger credit,” he said. “But we’ve got to do what we can do with the resources that are politically achievable right now.”

The Entertainment Union Coalition argues that the bill will also help retain the existing workforce, which otherwise would continue to erode. The coalition estimates that the expansion will result in 400,000 to 500,000 additional work days. By Variety’s calculation – the coalition wouldn’t go there – that’s about 10-15% of the total job loss in the last two years.

“While more resources would result in more jobs, we recognize the challenges of the moment and competing priorities,” said Rebecca Rhine, the president of the coalition and a top official at the Directors Guild of America. “But action is necessary now and we cannot let the perfect be the enemy of the good.”

Greg Bartlett, a unit production manager, helped form CA United last year to urge the state to increase the program to $1 billion.

“Even that may not be enough to stem it at this late stage,” he said, though he appreciates the move to $750 million. “It’s a little, and it’s late, and it needs to be more. But anything helps.”