On April 14, 2025, production workers packed a film and TV town hall at Evergreen Studios in Burbank, urging lawmakers to strengthen California’s film and television tax credit. The message was clear: California is losing its competitive edge, and without the right incentives, the state risks losing the very industries it helped create. While California once stood unrivaled in animation, visual effects, and post-production, other regions are now pulling ahead—with stronger support, growing talent pools, and billions in inbound production.

California was an animation powerhouse, now other jurisdictions are cashing in

Back in 1937, Snow White, produced in California, didn’t just break box office records—it launched a global industry. That moment cemented California as the center of animation innovation, home to the world’s most iconic characters and trailblazing studios. 

Nearly a century later, that dominance is slipping. 

Despite its creative legacy, California remains the only major production hub without a tax incentive for animation. And that policy gap? It’s costing the state billions. In 2010, 67% of the top 100 grossing animated films were produced in California. In 2023, that share dropped to 27%.  

Other jurisdictions have stepped in to fill the gap. As global demand for animation continues to surge—especially in genres aimed at adults—regions like New York, Georgia, British Columbia, Ireland, and Australia are investing aggressively. They’re offering targeted tax credits, building out infrastructure, and expanding talent pipelines to attract not only high-value animated projects, but expanding ecosystems that include gaming and visual effects. 

California Is the Only Major Production Hub Without an Animation Incentive and its Film & TV Tax Credit Framework is Outdated 

California remains the only major production hub without an animation incentive. That means most animated films and series are ineligible for the state’s film and TV tax credit. The irony? Snow White, the film that started it all nearly a century ago, wouldn’t even be eligible under today’s framework—and would likely be produced somewhere more cost-effective. 

This exclusion points to a broader issue: California’s film and TV tax credit framework is outdated. The last significant overhaul happened over a decade ago in 2014, when the state introduced a competitive, jobs-based model, expanded eligibility to include network television and relocating productions, and increased annual funding from $100 million to $330 million. Before that, the original 2009 program had focused narrowly on smaller-budget projects—such as independent films under $10 million, basic cable series, and features under $75 million. 

While the state made incremental updates in 2018 and 2023—adding bonus points for regional shoots, diversity requirements, and a refundable credit option—the program’s core structure and key exclusions remain largely intact. Animation, post-production-only projects, and video games continue to be left out. 

The state is decades behind other jurisdictions. Canada and Ireland rolled out animation-inclusive incentives back in the 1990s. Australia launched its federal program in 2007, with animation fully eligible. Competitive regions like New York, Georgia, and British Columbia all include animation in their incentive programs, along with post-production and gaming. These regions also offer more flexible terms—including higher or uncapped annual allocations, broader labor coverage (including above-the-line roles), and fewer restrictions on budgets and project types. 

These incentives are having visible impacts on the geographic distribution of animation jobs. Between 2019 and 2024, regions like New York, British Columbia, and Ontario all experienced significant gains in film and TV animation occupations—with British Columbia seeing a staggering 72% gain. Meanwhile, California experienced a 5% decline, signaling the consequences of standing still while others invest strategically. 

Hollywood’s Legacy Can’t Carry It Forever 

California still has world-class talent, unmatched studio infrastructure, and a global brand built on animation magic. But those advantages won’t last forever. SB 630 and AB 1138 offer a promising path forward by proposing to include animation in the state’s incentive framework and increasing annual funding to $750 million. But success hinges on smart implementation—and ensuring that smaller, independent studios aren’t shut out by high budget thresholds.  

If California wants to remain a global animation leader, it needs to show up like one. That means investing in the sector it pioneered before the rest of the world writes the next chapter without it. 

To read more about the animation industry landscape and what California can do to retain its animation talent and industry, check out our report: Reclaiming California’s role in Global Animation: The Case for Modernizing California’s Film and TV Tax Credit.