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Council Weighs Film Incentives Deal

City looks to keep film and digital production inside city limits

By Richard Whittaker, Fri., April 25, 2014

Council Weighs Film Incentives Deal

With multiple sound stages, globally recognized local filmmakers like Richard Link­lat­er and Robert Rodriguez, and a large film program at UT, Austin should be the moving image capital of Texas. But with fears that projects are bypassing Austin for other parts of the state, city staff is proposing a local production incentive to keep film and digital production inside city limits.

The idea doesn't come from the Austin Film Commission, but instead from the city's Economic Development Dept. On April 15, staff presented their plan for a Creative Content Incentive Program. Eligible productions would have to pay at least union minimum wages for film, TV, and commercial projects (plus workers comp and partner benefits) and a minimum of $11 per hour for the video game and visual effects industry, plus benefits. In return, the city would reimburse 0.5% of wages paid to cast and crew, with an extra 0.25% if the firm is locally based or the production promotes Austin. In a presentation to Council on April 17, staff requested $250,000 from the Economic Incentives Reserve Fund for the first year. Austin Film Commission director of film marketing Gary Bond said, "It's not a huge bunch of money, but it would be a little bit groundbreaking for the city."

No one in the industry says they like film incentives (well, no one except for producers and accountants), but they've become standard for states that want to attract productions: For example, without its 30% giveaway, Louisiana would be an industry afterthought, rather than the bustling film hub that it has become. That's why the Texas Legislature introduced the Film Industry Incentive Pro­gram (now the Texas Moving Image Indus­try Incentive Program) in 2005. It has never been as generous as other states, offering between 5% and 22.5% depending on project size, but has at least slowed the flow of projects and jobs out of state.

The proposed Austin incentive supplements the state fund – in fact, only projects certified by the state program would be eligible. Its purpose is therefore not to attract productions to Texas, but to stop those projects from going elsewhere within the state. Currently, producers and developers get a 2.5% boost if they shoot in any historically underutilized area of the state (meaning any city that's not within 30 miles of Austin or Dallas). In addition, San Antonio has the Supplemental San Antonio Incentive program, giving another 2.5% for eligible productions shooting there. With its strong filmmaking tradition, the city's Global Business Recruitment and Expansion Coordinator Natalie Betts told Council, a level playing field would tip in Austin's direction. So unless the rest of the state is prepared to give up their financial incentives, city staff argues, Austin seemingly must step up to stay competitive.

The proposal returns to Council on May 15 for further consideration, but it's a long way from getting the green light. Council Mem­bers Chris Riley and Bill Spelman both pushed staff on whether the program was at least revenue-neutral for the city. Similarly, while the proposal comes with wage requirements, CM Mike Martinez was concerned that, like other similar city-backed funds, it should promote opportunities for minority- and women-owned businesses.

In any case, the local proposal depends on the continued existence of the state program, and that is always a risky proposition. The state film incentives program is funded from the biennial state budget, and there have been regular budget fights since it was established a decade ago. With Gov. Rick Perry – the program's biggest cheerleader – retiring, and both the House Appropriations and Senate Finance Committee chairs stepping down, its future could well be in flux.

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