Overview of Is California's $750 Million Bet on Hollywood Working?
This episode of The Town examines whether California’s expanded film-and-TV tax credit program is successfully luring productions back to the state. Host Matt Belloni interviews California Film Commissioner Colleen Bell about the state’s new $750 million annual incentive cap, the program’s expanded eligibility rules, and whether the strategy is enough to reverse runaway production to places like the U.K., Georgia, New Jersey, and New Mexico. The episode also touches on LA’s permitting and infrastructure challenges, the stalled post-production incentive push, the possibility of a federal credit, and why major projects like Netflix and Disney are still choosing to shoot elsewhere or in competing jurisdictions.
What California Changed — and Why
The new incentive structure
- California raised its annual film-and-TV tax credit cap from $330 million to $750 million.
- The program was modernized to cover more types of productions, including:
- Half-hour shows
- Animation
- Large-scale competition shows
- Bell frames the program not as a “giveaway,” but as an economic development investment designed to keep jobs, spending, and supporting businesses in California.
Early signs of impact
- The state says the changes are already helping:
- LA shoot days were up about 10% in the first part of 2026 versus the previous three months.
- Movie production was up 52% year over year.
- Nearly a quarter of movie filming in that category came from subsidized projects.
- Bell said applications jumped 82% after the new program launched.
Why Animation Became Part of the Program
Big studio beneficiaries
- For the first time, the incentives include animated projects.
- Projects from Disney, DreamWorks, Pixar, and NBCUniversal received significant support.
- Bell argues that large corporate projects matter because they employ Californians and keep the state competitive in a market where other regions offer aggressive incentives.
The competitive logic
- Bell repeatedly stressed that California had to respond to the incentives offered by:
- The U.K.
- Canada
- Georgia
- New Jersey
- New Mexico
- Her argument: if California doesn’t match the market, productions will leave.
What Still Isn’t Fixed
Above-the-line and post-production incentives
- California still does not offer major above-the-line incentives.
- A separate proposal for post-production incentives was discussed but didn’t make it into the budget.
- Bell said post-production incentives are still “in play,” though not finalized.
Soundstage and infrastructure problems
- LA’s soundstage market is still under pressure.
- The episode notes that Hackman Capital, a major independent soundstage owner, defaulted on a loan amid low activity.
- Bell said California has already exhausted a prior $150 million soundstage incentive pool.
- The larger issue remains: if production doesn’t come back, stage occupancy and real-estate economics remain weak.
Politics, Leadership, and the Future
Newsom’s role
- Bell said Gov. Gavin Newsom has become one of the state’s strongest champions of entertainment production.
- She credited him with backing the credit program in a way prior governors had not.
Her own future
- Bell revealed she will transition out with Newsom, which she described as effectively breaking news.
What comes next
- The episode raises the question of whether the next governor will maintain momentum.
- Bell said her hope is that future leadership will continue building on the current program rather than reverse course.
Local LA Friction: Fees, Permits, and Coordination
The city’s role
- Bell said her interactions with Mayor Karen Bass’s office and the city film office have been positive.
- She emphasized that tax credits alone are not enough — California also needs:
- Faster permitting
- Lower fees
- Better coordination across agencies
- Less friction from local requirements
Ongoing complaints from productions
- Bell acknowledged that producers and location managers still raise concerns about:
- Permitting fees
- Parking costs
- Security requirements
- Union-related costs and production complexity
- Her view: California must keep chipping away at these barriers to remain competitive.
Netflix, Federal Credits, and the Bigger Competition
Netflix’s out-of-state expansion
- Bell discussed Netflix’s decisions to build major hubs in New Jersey and New Mexico instead of California.
- She said Netflix CEO Ted Sarandos told her California remains important to them, but the company had several reasons for choosing those other locations, including:
- Incentives
- Land agreements
- Housing considerations
Federal incentive hopes
- Bell strongly supported the idea of a federal production tax credit.
- She said that stacking a federal incentive on top of California’s could make a major difference.
- Her bottom line: the U.S. is losing market share globally, not just California.
The Episode’s Main Takeaways
- California’s expanded tax credit program is already producing measurable results.
- The state is now more competitive, especially after increasing the cap and widening eligibility.
- But California still faces structural problems:
- High costs
- Regulatory friction
- Competition from lower-cost jurisdictions
- Weak soundstage utilization
- Bell sees the policy as a necessary response, not a final solution.
- The next phase will likely depend on:
- Whether the new governor stays committed
- Whether post-production or commercial incentives advance
- Whether federal support ever materializes
Post-Interview Segment: Moana Box Office Discussion
Why Disney’s live-action Moana is a question mark
- Belloni and Craig Horlbeck discussed Disney’s upcoming live-action Moana remake.
- Their concern: it arrives too soon after Moana 2, which was originally developed as a TV project and then turned into a billion-dollar theatrical sequel.
- The core issue is creative necessity:
- Why does the live-action remake exist so soon after the animated sequel?
Box office expectations
- The episode notes weakening tracking for the film:
- Early estimates were around $75 million
- Then fell toward $60 million
- Belloni set the line at $50 million
- Both leaned toward the under, suggesting the movie may not meet expectations.
Broader Disney remake skepticism
- The conversation frames Disney’s live-action remakes as increasingly hit-or-miss:
- Some succeed, like Lilo & Stitch
- Others struggle, like The Little Mermaid and Snow White
- Their conclusion: Disney is likely to become more selective with these projects going forward.