California Governor Candidates Rally Around Uncapped Hollywood Tax Credits

Leading candidates in California's 2026 gubernatorial race have voiced support for eliminating the state's $750 million annual cap on film and television production tax incentives. During a CNN debate in Los Angeles on May 5, former U.S. Representative Katie Porter said she would support an uncapped film tax incentive and former Los Angeles Mayor Antonio Villaraigosa said the state needs an unlimited tax credit that covers both above-the-line and below-the-line costs. Support for removing the cap crosses party lines, with Republican candidate Steve Hilton and Democratic candidates Matt Mahan and Tom Steyer also backing proposals to raise incentives and remove the existing limit.

The Details

Seven leading California gubernatorial candidates gathered in Los Angeles on May 5 for a CNN debate moderated by Kaitlan Collins and Elex Michaelson. During the televised event, former U.S. Representative Katie Porter, a Democratic candidate, said she would support an uncapped film tax incentive, according to TheWrap. Porter told the debate audience, "I think we need to be competitive in California."

Former Los Angeles Mayor Antonio Villaraigosa, also running as a Democrat, said the state needs an unlimited tax credit that covers both above-the-line and below-the-line costs. "We do need an unlimited, untapped tax credit. And it needs to be above and below the line," Villaraigosa said during the debate, TheWrap reported.

San Jose Mayor Matt Mahan, a Democratic candidate, proposed eliminating the $750 million cap and including above-the-line salaries, Variety reported. In an interview with Variety published ahead of the debate, Mahan said, "Hollywood is the centerpiece of the California economy." Variety reported that Mahan's plan would remove the existing cap entirely and extend eligibility to cover above-the-line costs that are currently excluded from the state's incentive program.

Businessman Tom Steyer, another Democratic candidate in the race, supports removing the cap and raising incentives, according to ABC7 Los Angeles. ABC7 reported that Democrats Matt Mahan and Tom Steyer and Republican Steve Hilton all agree the tax credit should not be capped and want incentives raised.

Former Fox News host Steve Hilton, the Republican candidate in the race, wants an uncapped California incentive and would allow above-the-line and post-production costs, according to The Hollywood Reporter. Hilton is floating a film tax credit as high as 60% for some productions. "I don't want to be reckless with resources but if we want to really change behavior, we may have to do something extravagant," Hilton told The Hollywood Reporter. ABC7 Los Angeles separately reported that Hilton's plan includes raising incentives and removing the cap, with Hilton's proposed credit reaching as high as 60% for some productions.

The current California film and TV tax credit program was expanded in 2025 to support up to $750 million in credits per year. Prior to the 2025 expansion, the program allocated $330 million annually. The state more than doubled the program and broadened eligibility, but the industry still argues that production is leaving California for more aggressive incentive jurisdictions in other states and countries.

Context

Variety reported that California lost about 51,000 film and TV jobs over the last three years, giving candidates a shared, specific justification for expanding production incentives. The job losses have become a central talking point on the campaign trail as candidates argue for more aggressive state support to keep film and television productions from relocating to competing markets.

Unions generally prefer keeping incentive dollars focused on below-the-line costs, which cover crew wages and technical expenses, while studios and some candidates argue above-the-line eligibility, which includes director and actor salaries, is needed to compete with Georgia, New York, and international markets, according to Variety and The Hollywood Reporter. The distinction between above-the-line and below-the-line coverage has emerged as a key policy tension within the broader consensus among candidates that the program should be expanded.

What's Next

No campaign provided a concrete fiscal estimate for an uncapped statewide program in the sourced coverage reviewed here. Porter's position on the cap appeared to shift between earlier campaign comments and her remarks at the debate. Variety reported that Porter previously said she wanted to see how the expanded $750 million program performs before committing to raising the cap further. TheWrap reported that Porter said at the May 5 debate that she would support an uncapped tax incentive. TheWrap characterized the difference as likely a clarification or evolution in Porter's position between earlier campaign comments and the debate stage.

The shared stance across party lines suggests the issue will remain prominent as the campaign progresses toward the general election. However, candidates have not released detailed implementation plans, cost projections, or legislative language that would outline how an uncapped program would be administered, how it would be funded, or what guardrails would prevent the credit from ballooning beyond projected revenue offsets.