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A lifeline for Hollywood jobs or a corporate giveaway? The film tax credit debate returns

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A lifeline for Hollywood jobs or a corporate giveaway? The film tax credit debate returns

It’s showtime for Hollywood at the California Capitol.

The state’s entertainment industry has spent months begging for help from Sacramento to stem the decline of film and TV production and save thousands of jobs.

This week, after months of speeches and promises from public officials, two bills meant to boost the beleaguered business cleared their first legislative hurdles.

The bills are intended to make California’s film and TV production incentive more competitive with other states and countries by increasing the tax credit up to 35% of qualified expenditures and expanding the types of productions that would be eligible.

It’s a potential lifeline for the entertainment industry, which has been battered in recent years by production slowdowns wrought by the pandemic, the dual writers’ and actors’ strikes in 2023, a pullback in spending by the studios, the recent Southern California wildfires and productions fleeing the Golden State.

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“We don’t want to become the car industry in Detroit or aerospace in California,” said Rebecca Rhine, president of the Entertainment Union Coalition and Western executive director of the Directors Guild of America. “When our industry thrives, we think California thrives.”

The bills won unanimous votes out of the state Senate revenue and taxation committee and the Assembly arts and entertainment committee.

But despite Gov. Gavin Newsom’s initial call last year to more than double the money allocated to the state’s film and TV tax credit program, passage of the two bills is far from a done deal.

Critics have been skeptical of the film and TV tax credit program since it was introduced in 2009 under former Gov. Arnold Schwarzenegger. Some say the tax credits are corporate giveaways and don’t deliver as much economic value as proponents claim.

“The economy does best when government doesn’t pick winners and losers,” said Wayne Winegarden, senior fellow of business and economics at Pacific Research Institute, a California-based think tank that advocates for free markets. “This is not the right way to get a pro-growth fiscal business environment that accelerates job growth.”

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Additionally, California now faces a difficult economic outlook, as officials brace for potential cuts in federal funding, as well as tariff-related pressures on state revenues and stock market volatility that could reduce tax collections that fund state programs.

That all forces difficult questions for legislators about which priorities to fund.

In a recent post on X, Assemblymember Corey Jackson said Democratic voters in California “should be outraged that we aren’t spending more on housing, allowing seniors to fall into homelessness, and allowing so many children to live in poverty. For corporate and movie studio tax breaks.”

Reached by phone, Jackson said that while expanding film and TV tax credits is a worthy policy, state lawmakers must consider what they’d have to sacrifice for them, particularly as the state budget is under stress.

“If we were back in the period where we have more money than we can spend, this would be a no-brainer,” Jackson said. “But it’s time to bring people back to reality. This should not just be a slam-dunk to people.”

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Hollywood workers argue that an expanded film and TV tax credit would generate economic returns beyond the industry, with ripple effects touching tourism as well as small businesses such as dry cleaners, florists and caterers that rely on entertainment spending. And after years of struggles, workers say the industry is at an inflection point.

That has led to a major lobbying effort on Hollywood’s part.

More than 100,000 letters have been sent to individual state lawmakers in support of the bills, with an additional 22,000 letters sent to the Senate revenue and taxation committee.

Dozens of representatives from all of the major entertainment industry unions trekked to Sacramento to support the legislation, as did studio executives, their lobbyists and the Motion Picture Assn. trade group.

It’s the kind of show of force State Sen. Ben Allen and Assemblymember Rick Chavez Zbur, two of the bills’ co-sponsors, had called for when they spoke to a crowd last week at Burbank’s Evergreen Studios recording facility and urged entertainment workers to contact their representatives.

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“It’s going to be a fight to get this done because of the headwinds,” Allen told the crowd, noting that there are many competing priorities at the state level. Just the mention of the legislation was enough to elicit applause and cheers from the audience.

Industry insiders and lawmakers, including at the Burbank town hall, have tried to fend off criticism that this is a gift to corporations.

They described them as jobs bills that will reward the productions that generate the most employment and will not allow companies to use the tax credits until after production has wrapped.

California currently provides a 20% to 25% tax credit to offset qualified production expenses, such as money spent on film crews and building sets. Production companies can apply the credit toward any tax liabilities they have in California. Raising the credit to 35% is significant, supporters say. Projects that shoot elsewhere in the state could get a credit of 40%.

The legislation also would expand the types of productions that would qualify, including animated films, shorts and series, along with large-scale competition shows. Independent productions will be allocated 10% of the total amount in the program, up from the current 8%.

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“In some respects, the headwinds have actually strengthened the bill,” Allen told The Times. “They’ve forced really careful, intense, thoughtful, targeted conversations and negotiations.”

Outside of Hollywood, the bills have the backing of the California Labor Federation, whose executive council unanimously voted to support the legislation in February, said President Lorena Gonzalez.

Though the organization is not always supportive of tax credits, the federation has always supported the film and TV program, she said.

“The fact is the unique situation with Hollywood being so unionized,” said Gonzalez. “In order to preserve those good union jobs and the middle-class lives that are developed as a result, we’d like to keep those jobs here.”

The lobbying effort has led to unusual alliances, particularly in the wake of the strikes, with both studios and Hollywood unions rallying on the same side. Both groups, however, have worked together on previous film and TV tax credit proposals.

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In a letter to the leaders of the Assembly committee on revenue and taxation, Motion Picture Assn. Chief Executive Charles H. Rivkin wrote that the changes to the film and TV tax credit program would “help attract more productions and jobs in California.”

If the bill were enacted, he wrote, the studios will submit more applications to the California Film Commission, “leading to locating more of their productions in California, which will create and retain good jobs for Californians.”

But even within Hollywood’s overall push, there are differing priorities among stakeholders. During the Burbank town hall meeting, postproduction workers and music scoring professionals called for carve-outs, noting that other states and countries now offer specific rebates for this work.

That has led to a steep decline in production for these workers. The average number of booked recording days for a sampling of L.A.’s scoring stages is now 11 days for 2025 so far, a far cry from the average of 127 days for all of 2022 during the peak of the streaming boom, said Peter Rotter, founder of Encompass Music Partners, who helped organize the town hall.

Much scoring work has moved to Europe or even Nashville, while some postproduction work has been diverted to places like Canada and London.

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”It’s going to take a village,” Rotter told The Times. “We have one shot at this right now.”

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Crews Drape Tarp Over White House in Latest Trump Restoration

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Construction workers unfurled a large printed tarp to cover scaffolding installed at the White House’s front entrance. Doug Burgum, the interior secretary, said President Trump had ordered the repairs after noticing damage to columns.

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WATCH: Trump’s Energy chief reveals what escalating Iran tensions could mean for gas prices

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WATCH: Trump’s Energy chief reveals what escalating Iran tensions could mean for gas prices

NEWYou can now listen to Fox News articles!

Energy Secretary Chris Wright is telling Americans not to be concerned about the possibility of another surge of sharp increases in gasoline prices as tensions with Iran have started to escalate once again.

Asked whether Americans should worry about higher prices at the pump and how the Trump administration is preparing to keep the economy stable if the conflict continues to worsen, Wright told Fox News Digital: “It has not been any good behavior from Iran that’s allowed oil to flow. It’s been the United States military.”

“That’s not changing,” he assured, speaking from the Great American State Fair on the National Mall this week.

US CLAWS BACK KEY CONCESSION TO IRAN AFTER FRESH ATTACKS ON COMMERCIAL SHIPS IN STRAIT OF HORMUZ

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(Mario Tama/Getty Images) (Mario Tama/Getty Images)

With Iran striking three commercial vessels transiting the Strait of Hormuz on Monday and Tuesday, Wright doubled down in urging citizens to not credit Iran for the U.S. military’s work to ensure oil shipments continue flowing through the strait.

“Look, the U.S. Military has been the key asset here,” he said. “They have assured the flow of oil and gas through the Strait of Hormuz throughout. Not at the beginning of this conflict, but through the last six weeks.”

Wright said the administration is closely monitoring global oil supplies as the tentative ceasefire with Iran seemingly came to come to a halt, with President Donald Trump telling Secretary-General Mark Rutte the call for peace with Iran is “over” at the NATO Summit in Turkey on Wednesday.

But, he pointed to the continued shipping through the Strait as evidence that markets should remain stable.

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TRUMP SAYS IRAN CEASEFIRE IS ‘OVER’ AFTER IRANIAN ATTACKS TRIGGER MASSIVE US RESPONSE

President Donald Trump speaks at the White House on Tuesday, April 22. (AP/Alex Brandon)

“We’re of course constantly watching the supply of oil, the supply of refined products and what’s going on there,” Wright said. “And I think still all positive trends.”

Beyond geopolitical concerns, Wright also praised the new chain of discounted gas stations across Pennsylvania and New Jersey, Freedom Fuel, which promises customers prices below the national average.

The Trump administration, though not involved with the network, has heavily endorsed the new chain and its 25 locations.

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“We love it,” Wright said when asked about Freedom Fuel. “I mean, look, any mechanism we can to lower energy costs for Americans of all kinds, we’re all in on.”

“With Freedom Fuels, they’re just lowering it down to their wholesale price of gasoline,” Wright said. “So they’re not making any money selling gasoline, but they’ve got convenience stores. That’s how most gas stations make money.”

NEWSOM UNDER FIRE AS CALIFORNIA GAS TAX HIKE SENDS PUMP PRICES EVEN HIGHER

Gasoline costs are a known concern for many Americans, and amid surging prices there has been a considerable increase in those opting to purchase electric vehicles to save money long-term at the pump — with Tesla dominating the market for these types of models.

Wright argued one of the benefits to living in America is having the option to choose what type of vehicle you drive.

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“We just want people to buy what they would prefer,” he told Fox News Digital when asked his thoughts on increasing calls for support of the electrification of cars. “Consumer choice — you wanna buy an electric car, you wanna buy a gas powered car, diesel powered car, buy a big truck. That’s the choice.”

“That’s why you live in America. You get the choice of all those.”

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Black mold and $1 wages: Settlement forces immigrant detention centers to protect workers

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Black mold and  wages: Settlement forces immigrant detention centers to protect workers

In 2023, California regulators levied more than $100,000 in fines against the private operator of a federal immigration facility, kicking off a three-year battle over whether detainees who do work at the facilities should be considered employees.

The question went beyond semantics: If considered employees, the detainees would be subject to state worker protection laws.

A legal settlement announced this week now affirms that private immigrant detention facilities are subject to California’s workplace safety and health requirements.

“Every worker deserves a safe and healthy workplace and should be able to report workplace hazards without fear of retaliation,” said Denisse Gómez, spokesperson for the California Division of Occupational Safety and Health or Cal/OSHA.

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“Individuals who perform work in these facilities are entitled to workplace safety protections, and this settlement reinforces Cal/OSHA’s commitment to enforcing those protections and safeguarding vulnerable workers,” she added.

Under the settlement between California and the GEO Group, a Florida-based private prison company, the company recently withdrew its legal challenges and agreed to pay more than $100,000 in the fines.

The GEO Group did not respond to requests for comment.

Back in 2023, Cal/OSHA issued $104,510 in fines against the GEO Group. The agency had found six violations of state code by the company after detainees complained about a lack of protective equipment and proper training while cleaning the facility for $1 per day.

Detainees alleged they routinely wiped black mold off shower walls at the facility, saw black dust spew from air vents and used cleaning solutions that lacked instructions during the COVID-19 pandemic.

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The biggest fine levied against the GEO Group was for failure to establish and maintain “effective written procedures to reduce employee risk of exposure to aerosol transmissible disease.”

Advocates viewed Cal/OSHA’S recognition of the detainees as workers as a victory that could pave the way for future labor rights fights at other detention centers in the state.

But the GEO Group appealed, arguing that detainees participating in ICE’s voluntary work program make their own schedules and aren’t employees, so hazard exposure couldn’t be “as a result of assigned duties,” as California law states. Plus, the company argued, there wasn’t enough evidence that detainees were exposed to any hazard.

Early last year, the state’s Occupational Safety and Health Appeals Board rejected the GEO Group’s argument and found that detainees should be considered “affected employees.”

The GEO Group sued, but three days before a California Superior Court hearing in May, the company and Cal/OSHA reached the settlement.

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Along with paying the fines, the GEO Group agreed to draft plans for avoiding aerosol transmissions at 12 secure and reentry facilities in California, including five detention centers that hold immigrants.

“GEO ensures detainees are afforded the necessary tools, equipment, and personal protective equipment … to safely and effectively perform any necessary tasks,” the settlement states.

Gómez said the settlement also leaves intact the appeals board’s ruling that civil immigration detainees who participate in work programs can participate in proceedings anonymously, “acknowledging the potential for retaliation when individuals raise workplace safety concerns.”

But the question of whether detainees are employees and deserve certain protections isn’t entirely resolved — at least not for the federal government.

Last month, U.S. Immigration and Customs Enforcement released new standards for detention facilities across the country. The revised guidelines “emphasize that detainee volunteers participating in the voluntary work program are not considered facility and/or government employees” and thus not entitled to labor regulations.

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Attorney Mariel Villarreal said the timing of the new detention standards made her question whether the GEO Group had asked ICE to specify in its standards that detainees are not workers in response to its battle with Cal/OSHA.

“To me, it’s a reaction to this very settlement,” she said. Villarreal works for the California Collaborative for Immigrant Justice, which filed the original complaint on behalf of detainees who said they worked in unsafe conditions.

Villarreal pointed to a Washington Post report that GEO Group executives privately asked ICE to specify that detainees are not employees of the facilities where they work. Two top Trump administration officials, border czar Tom Homan and acting ICE director David Venturella, previously worked for the GEO Group.

New versions of ICE detention standards take effect as contracts are established or modified, so this year’s rules won’t immediately apply to every facility.

An ICE spokesperson did not comment about the settlement. The spokesperson, who did not provide their name in an emailed statement Wednesday, said the agency has begun transitioning detention facilities to meet the 2026 standards, “building on its longstanding commitment to safe, secure, and professional detention operations.”

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“ICE has consistently implemented many of these best practices independently, reinforcing its role as the leader in detention operations,” the spokesperson added.

The GEO Group and other immigrant detention center operators have faced other legal battles over workers’ rights, including lawsuits in Washington, Colorado and California over the $1-per-day payment.

Villarreal said she’s confident that the Cal/OSHA settlement would continue to hold even if California facilities incorporated the new standards. But she said she believes the statements are an attempt by the GEO Group to “sidestep responsibility” and avoid the possibility of being fined under similar circumstances in other states.

“These statements in the new standards are a way for them to try and preserve profits as much as possible,” she said. “GEO and ICE are so intertwined at this point that they have the same motives.”

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