The Animation Guild and several entertainment nonprofits based in LA have joined forces to publish a report that chronicles California’s slide from a once-thriving animation production hub. 

Released yesterday, Reclaiming California’s Role in Global Animation was put together by TAG, consulting firm CVL Economics, Titmouse Foundation (the LA-based animation studio’s nonprofit public charity) and the BRIC Foundation (focused on building a more inclusive entertainment industry). The 55-page report is part of an effort to lobby the government to improve the state’s animation and VFX tax credits. 

California lawmakers have proposed a new bill that would up the state’s tax credit for local film and TV productions from 20% to 25% of budget to 35%. Covering animated films, series and shorts for the first time, Senate Bill 630 is expected to pass, or not, before July. Then there’s Assembly Bill 1138, which passed its first committee vote on April 22 and seeks to broaden the tax credit eligibility rules so animated films and large-scale competition shows can also trigger the incentives. 

These measures are a “welcome step towards revitalizing California’s competitiveness,” the report says, but they rely heavily on existing tax programs that weren’t designed with the animation and VFX industries in mind. The solution to this, according to the report, is for industry stakeholders to lobby for statutory changes that match the reality of today’s animation production pipelines. 

The topline takeaway from Reclaiming California’s Role is that the Golden State is losing its ability to compete because it lacks specific tax credits for animation that already exist in 30 other US states—and also in many countries around the world. 

The global animation market is growing (860 animated productions were commissioned in 2024, compared to 558 in 2019) and expected to keep doing so. But California isn’t currently equipped to be a part of this growth, the report states, pointing to Disney’s Moana 2 as an example of how much the state is losing because of its lack of tax credits. 

If that major feature film had been produced in California, it would have supported 817 jobs and generated more than US$87 million in wages. The migration of projects away from California is costing the state jobs and forcing animation creatives to either leave the state or the industry. 

Alison Mann, president of Fourth Wall Animation and co-founder of BRIC Foundation, didn’t mince words when she critiqued the California animation industry’s current state in a release. “Most of my creatives have been out of work for over a year. Some of my most talented storyboard artists and directors have had to take unrelated jobs at places like Lowe’s just to make ends meet. Meanwhile, my international clients—who benefit from more robust government funding and incentives—continue to successfully launch independent features.”

Image courtesy of Lala Miklós via Unsplash.