


Time was running out to pass new California bills in 2005 when a power broker in the State Capitol got a request from the action movie star in the governor’s office. Gov. Arnold Schwarzenegger wanted lawmakers to give Hollywood studios $50 million in tax breaks to help prevent the movie industry from leaving.
But Democrats preferred to restore funding that had been cut from schools and support for disabled people. Republicans in the governor’s own party objected to the notion of assisting one industry over others. The effort fell flat, as did similar proposals over the next few years.
Among many Democrats, said Fabian Núñez, who was the speaker of the California Assembly at the time, the thinking about Mr. Schwarzenegger’s plan went: “Why does he want to give corporate welfare to rich people? That doesn’t make any sense.”
Times have certainly changed.
California lawmakers, most of them Democrats, approved a budget on Friday that includes $750 million to subsidize movie and television production, doubling the size of the state’s incentive program while making cuts elsewhere to help close its $12 billion deficit. A bill to make the tax credits available to more types of productions is expected to be approved in the coming days.
Some economists object to film subsidies, saying they are a poor financial investment for states, while proponents say they are necessary to slow an exodus of productions. Over the past 10 years, production in Los Angeles has decreased by more than one-third, according to FilmLA data. One Hollywood studio is flying Americans to Ireland to film a game show, and “The Substance,” a best picture nominee, was filmed in France even though it is set in Los Angeles.
“Expanding this program will help keep production here at home, generate thousands of good paying jobs and strengthen the vital link between our communities and the state’s iconic film and TV industry,” Gov. Gavin Newsom, a Democrat, said in October when he announced his plan to increase the tax breaks.