As production struggles to rebound after last year’s dual labor strikes, the competition between major U.S. film hubs to land projects is as intensive as ever. The governor of California in recent days took aim at Georgia to keep business in his state.
This weekend, California Gov. Gavin Newsom announced a proposal to massively expand the cap on his state’s film tax credit program from $330 million to $750 million annually. The goal: to better position California among its competitors, both domestic — such as Georgia — and those overseas.
Georgia has emerged in the past 15 years as a top U.S. filming destination behind California and New York. Newsom, a Democrat, has also emerged as a potential candidate for federal office in the years ahead, just as Republican Georgia Gov. Brian Kemp has.
In his remarks, Newsom criticized not only at the size of Georgia’s uncapped film tax credit — which often tops $1 billion in a year — but the state’s restrictive abortion law and other conservative policies.
“I don’t know how they can continue to afford that program, but we’ll see. We’ll see how long that lasts down in Georgia,” Newsom said. “But I will say, compare the values of this state to the values as it relates to workers and women’s rights, LGBTQ rights, civil rights, voting rights down in the state of Georgia,” Newsom said during a news conference Sunday. “I think it’s a pretty damn easy decision.”
In a statement, Kemp’s spokesman, Garrison Douglas, fired back.
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“After turning a nearly $100 billion budget surplus into a $47.5 billion budget deficit, Gov. Newsom is the last person on earth who should question another state’s fiscal standing,” Douglas said. “Georgia’s record of paying down debt while cutting taxes and returning billions of dollars back to taxpayers needs no defending. And by the way, how much does a gallon of gas cost in California?”
The political crossfire comes as Hollywood has slashed production spending and even shifted projects to other countries with even more lucrative incentive programs. The lull in production has hit Georgia hard, particularly film workers who have struggled to find steady work.
This is not the first time a governor in another state with a hearty film tax incentive has criticized Georgia’s legislative measures. In 2021, after Kemp signed a vast rewrite of Georgia’s election rules, New Jersey Gov. Phil Murphy sent a letter to major studios, including Netflix and Disney, condemning the law and encouraging them to bring their business to the Garden State.
In 2019, when Kemp signed a measure banning abortion after six weeks, commonly known as the “heartbeat bill,” there was a similar outcry from entertainment giants. Executives with Netflix and Disney both said they would rethink their investment in Georgia if the law went into effect. But the abortion law did not have a noticeable impact on Georgia’s production pipeline when it went into effect in July 2022 after the U.S. Supreme Court struck down Roe v. Wade.
Though the number of active projects in subsequent months steadily declined because of the impending labor strikes, both Netflix and Disney did not pull productions from the state. (Disney is currently filming the live-action version of “Moana” at Trilith Studios in Fayetteville.)
“For those who make those decisions, if you believe in those values, I hope you can express them by moving your feet and not just praying, as they say. Not just talking about them, but actually coming back to the state of California,” Newsom said during the news conference.
In a press release announcing the proposal, Newsom’s office said that California’s film tax program is typically “oversubscribed” due to the cap — more productions are applying for the funding than the state can legally provide. Between 2020 and 2024, California lost production spending due to the limited tax credit funding and increased competition in other regions, according to the press release.
Georgia’s program, the state’s largest corporate incentive, comparatively, does not have a cap, which has been the subject of criticism over the years. During last year’s Georgia legislative session, Republican legislators tried to limit how many tax credits could be transferred in a given year, arguing that the industry has matured since the program’s introduction in 2008. This measure did not pass.
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