H
ollywood insiders are sounding the alarm that Los Angeles is at risk of becoming "the next Detroit" due to a decline in TV and film productions. The city's decades-long status as the entertainment capital could come to an abrupt end if tax relief incentives aren't provided immediately.
Industry workers have raised concerns about the sharp decline in entertainment projects being carried out in Hollywood and California, with many celebrities already moving out of L.A. to states like Texas and Florida. A recent town hall meeting highlighted the need for changes to the state's entertainment production tax incentive, which currently only covers up to 20% of qualified expenditures.
Producer Noelle Stehman warned that if action isn't taken, California's film and TV industry will suffer a similar fate to Detroit's auto industry, which declined in the 1960s. State Sen. Ben Allen emphasized that high housing costs in Los Angeles are driving middle-class workers out of the city, making it difficult for the entertainment industry to retain its talent.
California Gov. Gavin Newsom has proposed increasing film incentives from $330 million to $750 million and boosting the credit to 35% while expanding the category of productions that qualify. The bill aims to provide tax relief and keep the film and TV industry thriving in the state.
A recent report by FilmLA found that on-location production in Los Angeles was down by 22.4% in Q1 2025 compared to the same period in 2024, with many productions opting for cheaper locations elsewhere. The decline has little to do with the California wildfires, which affected areas rarely used as filming locations.
California's competition from other states is a major concern, with New York offering a 30% tax credit and Georgia providing a 20% transferable tax credit. Illinois offers a 30% credit, with additional incentives for productions in economically disadvantaged areas.
Industry leaders argue that the proposed tax relief program is not a giveaway but rather a job program that will keep people employed and off unemployment rolls. Passing a better tax relief program could be a step in the right direction to keep the entertainment industry in Hollywood.
