State eyes Hollywood boost after denying agriculture

By Caleb Hampton

In the wake of President Trump’s election last November, a common refrain emerged among Democrats as they reckoned with electoral defeat: To win over rural voters, they would need to prioritize their economic concerns. 

“Their regions are being left behind,” Gov. Gavin Newsom told The New York Times last fall before embarking on a speaking tour across Trump-held districts in the Central Valley. 

For some farm advocates, it seemed incongruous to see the Democratic supermajority in Sacramento considering a major expansion of the state’s Hollywood tax credit just weeks after rejecting a bill that would have created a more modest tax credit to support struggling farms and farmworkers. 

Newsom last month proposed increasing the state’s film and television tax credit from $330 million a year to $750 million a year. 

Meanwhile, in April, the state Senate Labor, Public Employment and Retirement Committee rejected Senate Bill 628, which would have created a tax credit to offset the cost to farmers of paying overtime wages. The California Farm Bureau, which co-sponsored the legislation, estimated the proposed tax credit could cost the state budget $200 million to $300 million a year. 

The Legislature elected to ignore our arguments about putting more money in the pockets of farmworkers,” said Bryan Little, chief operating officer of Farm Employers Labor Service and senior director of policy advocacy at the California Farm Bureau. “It seems hypocritical that we can find $750 million for the Hollywood tax credit, but we can’t find $300 million to do this.”

The proposed tax credit was designed to address unintended consequences of California’s agricultural overtime law. Beginning in 2019, Assembly Bill 1066 phased in a requirement that farmworkers—like workers in most sectors—be paid time and a half when they work more than 40 hours a week or 8 hours a day. Previously, due to the seasonal nature of agriculture, farmers could employ workers for up to six 10-hour days a week without paying overtime. 

AB 1066, according to its proponents, was intended to boost earnings for farmworkers. But research suggests it has lowered farmworker income as employers cut hours to balance their wage bills. 

“There is really convincing evidence that work hours for individual farmworkers fell after the law went into effect,” said Alexandra Hill, an agricultural and resource economics professor at the University of California, Berkeley. 

SB 628, authored by state Sen. Shannon Grove, R-Bakersfield, was designed to incentivize farmers to restore overtime hours for employees who want them, with every dollar of the credit going directly into farmworkers’ paychecks. It was modeled on similar tax credits enacted by Democrat-controlled states after those states passed their own agricultural overtime laws.

“This bill could make our daily life a little better,” Guadalupe Gonzalez, a farmworker who lives in Solano County, said while testifying at the committee hearing on SB 628. During the past few years, Gonzalez and her partner have lost nearly a third of their income as their hours were slashed, she said, leaving their family struggling to cover childcare expenses and medical bills. “It has had a lot of consequences,” she told Ag Alert®.

The California Federation of Labor Unions led the opposition to the bill, characterizing the proposal as subsidizing farmers for a cost other employers bear on their own. 

“That drains funding from the general fund,” Sara Flocks, legislative and strategic campaigns director for the federation, said at the hearing. “That takes away from every other priority of the public.”

But the labor federation has lobbied in recent weeks in support of the film tax credit. 

“If steps aren’t taken to protect California’s film industry, the unionized middle class jobs it provides could vanish for good,” Lorena Gonzalez, president of the federation, said last month in a statement. “It is critical that the film tax credit expansion be approved.”

Gonzalez, while serving in the state Assembly a decade ago, authored California’s agricultural overtime law. She did not respond to a request for comment. 

Negotiations over whether to include Newsom’s proposed expansion of the film tax credit in the state budget are ongoing. The Legislature has a June 15 deadline to approve a final budget for fiscal year 2025-26.

Little said the Farm Bureau is not opposed to spending public dollars to preserve jobs in Hollywood. 

“It’s an iconic California industry,” he said, “but so is agriculture.”

The state’s fertile soils, long growing season, investments in water conveyance infrastructure and crop research, and its experienced farmers and farmworkers have made the Golden State an agricultural powerhouse unique in the world. But rising input costs and other challenges have plagued farmers in recent years, causing bankruptcies to rise and the production of some labor-intensive crops to shift from California to Mexico.

“We produce food to the highest environmental standards, labor standards and food safety standards probably in the world, and certainly in the United States,” Little said. “To the extent that voters and policymakers in California want all of these great things to happen, they need to recognize there’s a cost associated with that.”

Caleb Hampton is assistant editor of Ag Alert. He can be reached at champton@cfbf.com.