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California’s Proposed Postproduction Tax Incentive Bill

Introduction of Legislation by Assemblymember Nick Schultz

State Assemblymember Nick Schultz has taken a significant step toward revitalizing California’s postproduction industry by committing to introduce a bill specifically designed to create a standalone postproduction tax incentive. This announcement was made by a representative from his office during a recent town hall event aimed at Hollywood professionals, where the need for such initiative was clearly articulated.

Goals of the Proposed Legislation

Amanda Faissal, representing Schultz’s office, highlighted that the forthcoming legislation aims to draw back vital segments of the entertainment industry, including editing, sound mixing, and visual effects (VFX), back to California. Currently, while postproduction expenses may qualify for tax credits in California if the physical production occurs within state lines, these expenses do not qualify for dedicated incentives independently. This situation contrasts with the frameworks established in other states and countries, which actively offer such incentives to attract cost-conscious companies seeking to optimize their production budgets.

Context of the Initiative

This proactive legislative effort comes on the heels of a successful lobbying campaign led by Hollywood unions and community organizations in 2025. Their initiatives resulted in a dramatic increase of California’s film and television tax credit—from $330 million to a robust $750 million. The goal of this new bill mirrors those prior endeavors: to enhance California’s competitiveness against rival states such as New York and Georgia, as well as international players like the United Kingdom and Australia, all of which provide favorable postproduction incentives.

Community Reaction and Engagement

Faissal’s announcement was met with enthusiasm and applause at the town hall organized by the California Post Alliance (CAPA), an organization dedicated to reviving and expanding postproduction work in the state. Similar to the trend in physical production, the local postproduction sector has faced challenges, with many professionals and companies struggling to remain viable amid increasingly attractive incentives offered in other jurisdictions, alongside budget cuts from studios and streaming services.

Industry Challenges and Concerns

The town hall, hosted at Evergreen Studios in Burbank, served as a crucial platform for the postproduction industry to address a notable downturn in work over recent years. Engagement among industry professionals surged after an open letter from Peter Rotter, founder of Encompass Music Partners and Encompass Creative, circulated in early 2025. In his letter, Rotter cautioningly articulated that "the infrastructure of the L.A. recording industry [was] about to fail," spurring a town hall gathering where urgent concerns about Los Angeles losing its foothold in its core industry were voiced.

The Current State of the Industry

During the recent event, while discussions of potential solutions unfolded, participants grappling with the downturn also expressed anxiety about the local labor market and economic impact. In his opening remarks, Rotter poignantly stated that the current slowdown had “killed our community, the heart and soul of it.” He further elaborated on the dire situation: “Families can’t pay their rent on what little work is left. Editors are driving Uber instead of cutting reels. Sound designers are selling gear just to eat.” This description highlights an alarming trend indicative of a perilous ecosystem facing significant challenges.

Voices from the Industry

Two-time Oscar-winning sound designer Karen Baker Landers—known for her work on MaXXXine and Scream VI—shared her personal experiences, indicating that the absence of a standalone postproduction credit had resulted in the loss of four to five job opportunities. Similarly, Jennifer Freed, founder of Trevanna Post and Trevanna Tracks, outlined the impacts of the production exodus on her firm’s financial stability. “As studios seek tax incentives and lower overhead, the production map is just being redrawn,” she explained.

Statistical Overview of Decline

Data from CAPA presented during the event highlighted a troubling decline in California’s share of U.S. postproduction work, which had decreased by more than 11% between 2010 and 2024. Concurrently, the state experienced a nearly 17% drop in payroll employment in the postproduction sector, contrasted with a modest 2.5% overall increase in U.S. employment during that time.

Economic Insights from Experts

An early economic model shared by Adam Fowler, founding partner at CVL Economics, reported a staggering loss of approximately 4,451 jobs along with $1.63 billion in annual economic input for California’s economy over the last 15 years. He emphasized the significant retention rate within the entertainment industry, indicating that 93 cents of every dollar spent in Hollywood stays within the local economy. Fowler cautioned that as businesses relocate and the local supply chain diminishes, this impressive retention rate deteriorates, leading to dire economic repercussions for the community.

CAPA’s Advocacy Approach

In response to this alarming trend, CAPA aims to advocate for the Schultz-sponsored bill as a foundational strategy to address these challenges. The group has engaged a lobbyist and a public relations firm to amplify their message and efforts. Attendees at the recent town hall were encouraged not only to share information on social media but also to join as members and provide financial support to bolster the initiative.

Overcoming Hurdles in Advocacy

One of the key challenges facing the advocacy efforts is to elevate the often-overlooked contributions of editors, composers, and sound mixers to policymakers’ awareness. CAPA’s president, Marielle Abaunza, highlighted the necessity for industry professionals to come forward: “We need to come out of our dark rooms… We need to now take a moment to turn the camera and the light and shine it on us. We need to tell our stories.”

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