Newsoms Hollywood tax credit blunder just the latest mistake

Gavin Newsom has a long record of blunders, from the French Laundry to the Train to Nowhere.The latest is the Hollywood tax credit, which he canceled by mistake.The story began last year, when the governor signed AB 1138, the California Film & Television Jobs Act.

It more than doubled the state’s tax credits for Hollywood productions, from $330 million per year to $750 million per year. The state is under pressure to compete with other states and countries that have lower costs and generous benefits for film and TV productions.New Jersey, for example, generally a high-tax state, offers $430 million per year in tax incentives for Hollywood studios.

That has put the Garden State on the entertainment industry map — even as it has cost the Golden State jobs.Earlier this month, Newsom touted the success of the expanded Hollywood tax credit, claiming that it would bring $6.6 billion in economic benefits.However, what he granted with one stroke of a pen, he took away with another.Newsom’s budget for the next two years includes a new cap on tax credits for corporations.Companies can only claim up to $5 million in tax credits, or 70% of tax liability, whichever is higher.That means that the Hollywood studios can barely take advantage of the tax credits that were passed for their benefit.  California's top news, sports and entertainment delivered to your inbox every day.Please provide a valid email.

By clicking above you agree to the Terms of Use and Privacy Policy.Never miss a story How did that happen? Apparently, the state legislators who voted on Newsom’s budget imagined there was some kind of special Hollywood carryout. Nobody seems to have read the bill.Now the legislators, and the governor, will have to pass a fix that lets Hollywood off the hook.Naturally, other California businesses might ask: Why should Hollywood get special treatment? After all, the costs and regulations that make filming d...