It has been one year since California lawmakers approved a dramatic increase to the state’s production incentive program, and the number of film and TV shows applying for a tax break to film in the Golden State has since dramatically increased.
But it’s far too early to declare “mission accomplished.”
In an exclusive video roundtable with TheWrap, leaders at the Directors Guild of America, Producers Guild of America and Stay in LA said that while there is reason for optimism, it will take many more years of work throughout the industry if there is any hope of undoing the years of decline in production work that has ravaged California’s entertainment workforce. Their comments provide scale to the magnitude of the problem the state faces in reviving Hollywood.
“I feel like some folks treated the tax credit like the finish line last year, and it’s great to hear that we’re kind of all in agreement that it was really the starting gun,” said Kate Holguin, producer and head of legislative affairs for Stay in LA. “Sacramento obviously made an enormous investment in making California competitive, but the incentives really just get California into the conversation, right?”
Holguin was joined by Rebecca Rhine, Western Executive Director for the DGA and president of the Entertainment Union Coalition, and Susan Sprung, president/CEO of the Producers Guild. Like Holguin, Rhine and Sprung were deeply involved in lobbying for the expansion of the California incentive program, which got a cap raise from $330 million to $750 million and expanded the types of projects eligible for incentives, including animation and large-scale competition shows.
While ProdPro reported a modest 5% increase in production spending in California in the second quarter of 2026, FilmLA reported that on-location shoot days in Los Angeles for that quarter dropped 12% year-over-year, continuing a years-long trend that was exacerbated by the 2023 industry strikes.
Sprung noted that it will still take several more months before the full impact of the first year of the incentive expansion will be reflected in the data. While the on-location shoot declines are a troubling sign, that does not include productions that have received the incentive but are largely soundstage based, like HBO’s “The Pitt.”
“Obviously [there] were programs that got it immediately and are up and running, but there are also a huge number of productions that are still in pre-production,” she said. “Fingers crossed, we want to see where we are six months, in a year from now, to see whether we have a consistent uptick.”
For Hollywood labor, 2026 was supposed to be a slower lobbying year compared to 2025. The primary focus had been on Assembly Bill 2319, which is up for a vote in the California State Senate in the coming weeks and would establish an incentive for post-production work available to projects shot in and out of the state. IATSE and its post-production locals, including the Motion Picture Editors Guild, have pushed for its passage.
But a twist came in late June with the passage of Senate Bill 122, a law intended to aid California’s often tricky budget balancing by limiting the amount of tax credits any business can receive annually to either $5 million or 70% of its total liability, whichever is greater.
Rhine said that the EUC scrambled over the past two months to push for an exemption for productions, warning that SB 122 could undermine California’s competitiveness for global production, as projects that applied for eligibility in the past year will suddenly have to wait years to get the full value of the tax credits they earned based on eligible in-state spending.
“In my view, [SB 122] puts us at risk of not being able to bring any production back here because it begs the question whether [producers] can rely upon the promises made in the state of California,” Rhine said. “There are two things productions have to have: their certainty and predictability. They have to know that what they’re promised is what they’re going to get when they make decisions, and they can’t be in a position where the rules change down the down the line.”
Lawmakers and union insiders have told TheWrap since the roundtable was taped that a deal is set to be announced in the coming days on changes to the incentive program to account for the SB 122 cap, including an exemption for independent productions and an acceleration of tax credit payouts to productions that complete their payments to workers and vendors. But the deal stops short of extending a full exemption to productions from major studios, as insiders say there is concern among lawmakers that it will lead to other industries calling for exemptions of their own.
It remains to be seen how those changes will affect studio interest in filming in California compared to other states, like New York and Illinois, which have also ramped up their efforts to bring in productions with their own incentive expansions, as well as major overseas hubs like London and Vancouver, which continue to offer extremely lucrative packages.
Sprung, Rhine and Holguin hope that the first year of the expanded program will bring noticeable improvement to California’s entertainment job market. That, in turn, can be used as evidence to used to push for further changes to make the incentive program even more competitive, such as allowing salaries of above-the-line talent like actors and filmmakers to count as eligible spending as it does in the U.K. and Canada. The lobbying campaign is also expected to extend to Washington, where plans are being made to push for a federal film tax credit in 2027 following this November’s congressional midterms.
And on the local front, Stay in LA has lobbied Los Angeles Mayor Karen Bass, FilmLA, the City Council and the Board of Public Works to continue reducing permitting fees and processing times to make it easier for productions, especially indie ones, to film in Los Angeles. Holguin said that they have urged officials to improve regional coordination between various jurisdictions on permitting, but have been told that the budget constraints that the city has faced since the 2025 wildfires have made it difficult to do so.
“I understand that local government is stretched thin, and regional coordination is genuinely very difficult. But that’s kind of how we already ended up here,” she said. “We can’t explain all the reasons you know a problem is difficult to solve, but then just stop there. So I really want decision makers at the local level to really own this work and bring the different jurisdictions together in the 30-mile zone, establish a plan, and be accountable for getting something like this done.”
Watch the full panel in the video above.
