The Texas Moving Image Industry Incentive Program, the state’s initiative to attract film, TV, and game production, has been a political kickball since it was founded in 2005. Those arguments have resulted in volatile funding levels, from a peak of $95 million a decade ago to less than half that now.
This year, the expectation is that Gov. Greg Abbott’s proposed budget will stay at the current $45 million for the 2024-25 biennium; but the moving image industry – film, TV, gaming, commercials, and instructional videos – is asking for more. They’re not just asking that lawmakers reverse the 10% across-the-board reduction that all state agencies suffered in the current biennium. They’re asking for $200 million.
In mid-January, the Texas Media Production Alliance held a sit-down meeting of industry players, and they all came out on the same page. TXMPA Communications Director Mindy Raymond said, “We all want the same thing. We want to bring more jobs to Texas.”
It all comes down to a very simple equation: According to Texas Film Commission calculations, every $1 in production rebates means $5.04 of in-state spending. If the Legislature does pick up on TXMPA’s proposal, that could mean roughly three-quarters of a billion dollars extra coming to Texas. TXMPA President Paul Jensen said, “There’s a crystal-clear correlation between how much funding we have in TMIIIP and how much media production happens in Texas.”
If that seems like a lot, it’s because Texas has traditionally not allocated enough. New Mexico budgeted $130 million in incentives in 2022 alone, a pittance compared to Georgia’s $1.3 billion. Such a raise would also be in line, in percentage terms, with Oklahoma, which increased its tax credit fund from $8 million to $30 million in 2021 – and that’s per annum, not for two years as in Texas. And that’s where Texas’ troubles really start. There’s just not enough money in the kitty, and even though the current biennium does not finish until September, productions were being told last year that the fund was already empty. Jensen said, “When the program’s unfunded, that means the projects can’t really look at Texas as an option.”
And just a couple of big productions eat it up fast: For example, the CW’s Walker alone was repaid $9.3 million in 2021. “Repaid” is the important word there. Advocates for the program roll their eyes about the word “incentive” because it’s actually a tax rebate program, rather than an up-front grant. It also sets a high bar by requiring that a minimum 60% of production takes place in Texas and 70% of cast and crew be Texas residents. Moreover, each application goes through several levels of accounting scrutiny before a single cent is returned. Austin Film Commission Director Brian Gannon said, “They’re not getting paid until everything’s in the can.”
“We all want the same thing. We want to bring more jobs to Texas.” – TXMPA Communications Director Mindy Raymond
However, combined with the quality of Texas’ crew base, that small amount can be enough to convince producers to shoot here – “here” being the entire state. Texas provides an incredible variety of locations within relatively short drives of the major production hubs. Gannon explained, “What happens in Austin always spills into these communities.” He noted Yellowstone creator Taylor Sheridan filming at his 6666 Ranch, in between Ft. Worth and Lubbock: “That’s gaining some fans within the Legislature that may not have seen action in their districts. … It’s opening eyes that this is a business, and it betters communities.”
That’s where TXMPA leadership is making their argument for a big increase. Raymond said, “We’ve been beating the drum long enough that this is a jobs program, it’s not a culture war,” and that’s being reflected in the lobbyists being hired, like Mike Toomey, former chief of staff to Gov. Rick Perry, who is representing the massive planned Hill Country Studios in San Marcos.
After all, TMIIIP is not an arts program. It’s incentivizing big businesses to pick Texas over any other state. If there are no incentives, they will go elsewhere, and there’s already a long list of runaway productions. With the TMIIIP coffers empty halfway through the current biennium, AMC absorbed the enormous cost of relocating Fear the Walking Dead from Austin to Savannah, Georgia, for its final season. Last year, Texas Monthly touted a new deal with HBO to turn Texas stories into Texas movies and series, and one of those productions, King Rex starring Henry Winkler, is set to film with New Mexico filling in for Texas. That’s just one of an estimated half-dozen major series that were in conversations to shoot in Texas – including Walker spinoff Walker: Independence – that followed the incentive money out of state. Jensen said, “Texans are tired of other people telling our stories.”
The biggest concern is that, if there isn’t a dramatic increase, proposed rule changes could see the TMIIIP coffers empty faster than ever. Last December, the secretary of state’s office proposed new language that, if accepted by lawmakers, would extended what’s eligible. For example, under the proposals, any animated or digital project could apply for a rebate for any work from the first day of asset creation, such as character modeling. On the other end of the pipeline, they would be able to get a rebate on post-production expenditures like image compositing and bug fixes. Gannon said the potential change could reflect how much of a production’s costs come after shooting finishes. “Apollo 10½ shot for about a month, but their post was close to two years. Those are people who are being paid and doing work for that consistent amount of time.”
Those changes would more accurately reflect how modern production works than the current language, and Jensen praised the Texas Film Commission for “trying to modernize their rules” and for the fact that the proposals reflect conversations with stakeholders that benefit all, especially with technological advances increasingly blurring the lines between gaming development and film production. However, it could empty that purse even faster. Jensen added, “The bottom line is that we’re asking for $200 million.”
This article appears in February 17 • 2023.
