Republican Gov. Hopeful Steve Hilton Proposes Bigger Film Tax Credits and Studio Funding

Steve Hilton, the Republican candidate for California governor, unveiled a plan on Wednesday to boost Hollywood production with higher tax credits and state‑backed financing for studio upgrades.

What Happened

Hilton’s proposal raises the state tax credit for eligible film and TV projects to 40% and suggests a temporary increase to 50% for five years. He also wants to remove the $750 million cap on the incentive and make credits automatic, promising rolling approvals within 30 days. The plan adds a five‑year sales‑tax exemption on building materials for studio construction and offers state‑backed bond financing for studio acquisition and renovation. It expands eligibility to commercials, documentaries and reality TV, and includes a proposal for a 40% credit on sound‑stage modernization.

Reaction

Democratic rival Xavier Becerra, who leads in the polls, released a shorter position paper and declined to commit on eliminating the cap, saying he will wait for legislative proposals. Both candidates cite a loss of about 52,000 production jobs in the past four years and back a new federal film incentive that would give a 20% credit on all U.S. labor costs.

What’s Next

The proposals will face the state legislature, which must decide on funding and the cost of removing the cap. Hilton’s plan does not specify the budget impact of automatic credits, leaving that to future debate. Meanwhile, Los Angeles soundstage occupancy sits at 62%, and the $150 million incentive approved by Gov. Gavin Newsom in 2021 has been exhausted.

Context

California’s film tax credit system, currently offering 35% on below‑line costs with bonuses up to 45%, is a key tool states use to keep productions local. Expanding credits and easing studio costs aim to make the state more competitive against other U.S. and international locations.