Los Angeles may be on the brink of losing its crown as the entertainment capital of the world. Industry insiders warn the city could become “the next Detroit” if lawmakers don’t act fast to offer better tax incentives to keep film and TV productions in California.
Key Facts: The Crisis Behind Los Angeles Becoming the New Detroit
- A town hall on April 14 featured producers and lawmakers urging changes to California’s film tax credit system.
- Producer Noelle Stehman compared Hollywood’s decline to Detroit’s auto industry collapse.
- Filming in L.A. dropped 22.4% in Q1 2025 compared to the same period in 2024, per FilmLA.
- High housing costs and limited tax breaks are pushing productions to other states like Texas, New York, and Georgia.
- Gov. Gavin Newsom backs a bill (SB630) to raise California’s film tax credit cap to $750 million and expand qualifying productions.
The Rest of the Story: How L.A. Risks Losing Hollywood’s Spotlight
Hollywood’s slow-motion unraveling isn’t happening by accident.
Tax breaks in other states are drawing more productions away from Los Angeles each year.
FilmLA reports a 22.4% drop in on-location filming for the first quarter of 2025 compared to last year—despite wildfires having only a temporary impact.
The issue centers around cost.
California is the only major film hub that excludes “above-the-line” costs like actor salaries from its tax credit qualifications.
Producers are increasingly choosing to film in states like Georgia, New York, or Illinois, which offer more generous and flexible incentives.
State lawmakers are now pushing for changes through SB630, which would boost the current tax credit cap from $330 million to $750 million and allow more types of productions to qualify.
But even with support from Gov. Gavin Newsom, the bill has yet to pass—and time is running out.
Hollywood is a disaster so Gavin Newsom is doing a podcast. This worthless Governor has lost all credibility.
— Juanita Broaddrick (@atensnut) March 13, 2025
Commentary: California’s Recipe for Ruining Its Own Industry
If there’s one thing California Democrats have mastered, it’s how to chase prosperity out of the state.
Between skyrocketing housing costs, suffocating regulations, and lackluster tax incentives, the Golden State is making it harder and harder for any business—yes, even Hollywood—to survive.
It’s almost poetic.
Hollywood, once the shining symbol of California’s economic and cultural dominance, is now looking for a way out.
The very celebrities who cheered for higher taxes and bloated government spending are now packing up and moving to Texas, Florida, and beyond—seeking relief from the policies they once endorsed.
Meanwhile, middle-class workers in the entertainment industry are left holding the bag.
Senator Ben Allen nailed it when he said studio executives will be fine in Bel-Air no matter what.
But grip crews, set designers, camera operators, and costume workers?
They’re the ones suffering from this so-called progressive paradise.
The irony is rich.
California has all the natural advantages—weather, talent, infrastructure—but its political leadership has managed to sabotage even its most iconic industry.
If lawmakers can’t pass common-sense reforms soon, they’ll preside over the final credits of Hollywood’s golden age.
We don’t blame production companies for leaving.
Why stay and pay more for less?
But let’s hope the celebrities and execs who flee California leave their politics at the border.
The rest of America doesn’t need a sequel of the mess they helped make.
The Bottom Line: Why Los Angeles is the New Detroit in Entertainment
California’s grip on the film industry is slipping.
With other states offering more attractive tax incentives and a lower cost of living, Los Angeles is no longer the no-brainer choice for production.
Unless lawmakers act quickly, L.A. could follow Detroit’s path—once a booming hub, now a cautionary tale of government overreach and economic decline.
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