California’s government has agreed to more than double the state’s film and TV tax incentive to US$750 million a year, a boost that could ultimately benefit the state’s animation industry.  

The California Film Commission, which administers the program, previously had US$330 million to allocate each year. A formal vote is expected to be held on Friday to make Senate Bill 630 official. The increase is expected to create roughly 4,400 to 5,500 jobs, according to the commission. 

California’s governor Gavin Newsom first announced his proposal to expand the state’s Film & Television Tax Credit Program in October. The goal to draw more projects back to California; many productions have defected in recent years, attracted to other states’ more favorable tax incentives.

At the time the expansion proposal was announced, the commission noted in a release that the tax credit program doesn’t have enough money for all of its applicants, and most (71%) of the projects it rejects end up filming out of state. As a result of this migration, California lost out on an estimated US$1.6 billion between 2020 and 2024 that could have been spent on productions made locally, according to the commission. 

“I hope this incentive package is the rocket fuel our industry has been waiting for—keeping top talent and cutting-edge tech right here in Los Angeles,” says Tricia Biggio, CEO of LA-based Invisible Universe, which creates animated, digital-first IPs.

It’s important to note that this increase to US$750 million is separate from a companion bill, AB 1138, which seeks to open up the funding to animated films, series and shorts for the first time. That legislation is expected to be approved by July 4, and would take immediate effect. 

According to nonprofit org FilmLA, last year was Hollywood’s second least productive year on record—behind only 2020, when the industry all but shut down as the COVID-19 pandemic swept the world. The two bills combined could help bring animation, and more live-action TV and film productions, back to the Golden State. 

Image of California courtesy of Paul Hanaoka via Unsplash.