California’s star is dimming.

The Golden State could be losing more than $1 billion in film and TV production spending to rival states — even after Gov. Gavin Newsom rolled out record tax incentives to keep Hollywood at home.

California saw 20% fewer movie and TV projects filming last year, while spending on those productions fell 22% year-over-year, according to The Hollywood Reporter, citing a report from industry tracker ProdPro for the fourth quarter of 2025.

The decline comes despite California doubling its film and TV tax credit program to $750 million annually.

But states with similar tax breaks to California saw a rise in big and small screen productions.

The shifts suggest the Golden State could lose over $1 billion in production spending to New York, New Jersey and Illinois — even after rolling out its biggest incentive boost yet.

For instance, Netflix’s “Happy Gilmore 2,” released in 2025, recorded $152.5 million in qualified spending in New Jersey alone during a 60-plus day shoot, according to industry data — a single production budget that rivals what many smaller California projects shelled out combined.

Los Angeles alone logged just 19,694 filming days last year — a 16.1% drop from 2024 — underscoring how sharply production activity has slowed even in Hollywood’s backyard.

The dramatic drop was being felt by those who have given decades to the TV and film industry.

“Hollywood is the backbone of California’s economy. It was an institution,” Nico Ruderman, a production sound mixer, told The Post Monday.

“But as times have gone on, the business model has changed — and Sacramento just has not kept up.”

Ruderman said free social media content and shrinking studio margins have made production costs far more sensitive than in past decades, while rival states have aggressively capitalized.

“Other states remove caps, broaden what costs qualify, and make credits transferable,” he said. “If you qualify, you get the incentive.

“In California, productions still compete for limited funds and hope for the best.”

Democrat Newsom signed legislation in July 2025 doubling California’s film and TV tax credit program from $330 million to $750 million per year.

“The last data I saw indicated that California’s overall unemployment rate was the highest in the United States, except for Washington, DC,” noted Michael Thom, an associate professor in the Sol Price School of Public Policy at the University of Southern California.

“Perhaps film and television production continues to leave for the same reasons so many others leave: taxes are high, regulations are burdensome, and the cost of housing is absurd,” Thom said.

New York saw a 31% jump in film and TV production as Hollywood increasingly looked elsewhere, according to the ProdPro report.

In New Jersey, filming surged 75% in the fourth quarter of 2025 and production spending rose 12%, fueled by generous tax breaks and new studio developments.

The Garden State is also building massive new studio infrastructure to lock in that momentum. Netflix is investing $1 billion in a new East Coast production hub with 12 soundstages, while Paramount and Lionsgate have inked long-term leases at newly constructed studio lots.

Illinois also posted major gains, with filming up 70% year-over-year and spending climbing 46%, the report found.

Chicago is fast becoming a Midwest production hub, hosting major TV franchises like “Chicago Fire,” “Chicago P.D.,” “Chicago Med” and FX’s “The Bear,” as studios spread projects across cheaper, incentive-friendly states.

Meanwhile, Georgia remains the gold standard for US film incentives, offering uncapped, transferable credits that guarantee productions a break if they qualify.

New Mexico has also become a major draw with a 25% refundable credit that can rise to 40% through stacked bonuses.

“Although our overall numbers remain low, there are dozens of incentivized projects that have yet to begin filming,” FilmLA Vice President Philip Sokoloski told The Hollywood Reporter, urging patience as the expanded incentives begin to take effect.

The Newsom administration also pushed back on the idea that Hollywood was abandoning California, arguing the incentive expansion was already showing results.

“California remains the top destination for film and television production,” Tara Gallegos, deputy director of communications for the governor’s office, told The Post.

“In 2025, the Governor more than doubled the state’s Film and Television Tax Credit program — from $330 million to $750 million — and implemented key updates to keep production, below-the-line jobs, and investment rooted in California.”

Officials said major studios and streamers were still choosing California, citing recent tax-credit recipients including Apple TV+’s “The Studio” and “Bad Monkey,” HBO’s “The Pitt,” CBS’ “Matlock,” Warner Bros.’ “Joker: Folie à Deux,” Netflix’s “Beverly Hills Cop 4,” Fox’s “This Is Us” and Universal’s “Nope.”

According to Newsom’s office, applications for the tax credit have jumped more than 400%, and 42 new projects were announced in just the last two months of 2025. The California Film Commission has green-lit 28 new titles to begin filming soon, forecasting $562 million in total economic activity from those shoots.

“These tax credit programs directly benefit the below-the-line workforce — the electricians, set builders, costume designers, camera operators, and thousands of other skilled professionals who bring stories to life,” Gallegos said, adding that the expanded program is now one of the largest capped film incentives in the nation.

Still, industry analysts warn that California faces stiff competition not just from other states, but globally.

Overall US production fell 4% in the fourth quarter, while Canada and the UK both posted double-digit growth, signaling that studios are now hunting worldwide for the cheapest locations.

For now, California’s gamble on tax credits is buying time — but whether it’s enough to keep Hollywood from fully packing up remains an open question.

Ruderman, who unsuccessfully ran for state senate, said California needed to stop “playing catch-up” and overhaul its incentive structure to survive.

“It can’t be a Band-Aid. It needs to be a real jobs program,” he said. “We need to support all genres of production, above- and below-the-line workers, and make it economically viable to film here.”

He warned that if the industry fully leaves, it may never return.

“Once the industry goes away, it goes away,” Ruderman said. “Sacramento is such a cesspool. It’s people who just don’t get it. They are making decisions based on ideology and instead of real smart business decisions and it’s hurting.”