Outgoing Newsom calls for more tax breaks for Hollywood billionaires

California Governor Gavin Newsom has proposed increasing Hollywood tax breaks to $1 billion annually, including credits for movie stars’ salaries, in his final months in office. The Democrat wants to expand eligibility beyond the current $750 million annual program, offering a 5% credit boost to companies committing to at least two distinct California productions. Newsom's plan includes allowing studios to claim tax credits for "above-the-line" compensation such as pay for actors, directors, writers, and producers. The governor argues these expanded incentives are crucial for maintaining California’s dominance in the entertainment industry, citing $8.2 billion in economic activity generated by last year’s tax credit expansion. However, critics argue that the state should prioritize spending on issues affecting everyday residents rather than providing further benefits to wealthy Hollywood executives.