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Los Angeles, long the undisputed capital of the film and television world, is grappling with a production decline shaking more than soundstages. A stunning 22.4% drop in filming activity during the first quarter of the year has triggered a ripple effect reaching far beyond city limits, including the culturally vibrant Coachella Valley, home to one of the country's most beloved international film festivals.

At stake is more than just Hollywood glamour. The Palm Springs International Film Festival and other cinematic events throughout the valley rely on the pipeline of fresh, diverse films that once poured steadily from L.A. studios and independent creators. With fewer productions being made locally, that pipeline is tightening—and so are the economic opportunities tied to it. Fewer films mean fewer premieres, fewer visiting industry professionals, and fewer tourism dollars flowing into Coachella Valley’s hotels, restaurants, and event venues during festival season.

Neil Portnow, co-owner of Evergreen Studios, points to the broader fallout: “Everywhere I go feels like a ghost town. It ripples out. The restaurants have fewer people. The stores have fewer buyers.” While his comment is aimed at L.A., the same logic applies to Palm Springs, where the entertainment sector boosts everything from local arts nonprofits to small business revenue in January’s post-holiday season.

Meanwhile, states like Georgia and New Mexico are aggressively capturing the projects California used to claim, offering competitive tax incentives that make in-state production seem increasingly unaffordable. Despite being home to world-class crews and iconic landscapes, California’s tax credit system has failed to evolve fast enough to keep talent and economic impact anchored here.

Governor Gavin Newsom and state lawmakers are under growing pressure to retool the state's incentive program to retain the film industry and protect the broader creative economy it fuels. Without urgent reform, the downstream effects will be felt in Hollywood and every festival screening room, hotel lobby, and red carpet reception throughout the Coachella Valley.

If California doesn’t act soon, the next film festival in Palm Springs may have more retrospective tributes than fresh premieres—and that would be a plot twist nobody wants.