Texas Moving Image Industry Incentive Program Could Be a Lifeline for the State Economy

Image by Chronicle Art Staff

In a time of economic hardship, when tax revenues are falling and the state faces new expenses in the heat of the COVID-19 pandemic, every Texas lawmaker is looking for ways to save money as they build the state's budget for the next two years. So it would be easy to imagine that, when the Senate Finance and House Appropriations committees start their respective debates in the upcoming session, the Texas Moving Image Industry Incentive Program (the state's film, TV, and gaming rebate) would be on the chopping block. After all, why wouldn't handouts for movies be up for cuts, especially when TMIIIP has been such an easy target for conservative lawmakers eager to score easy points against Hollyweird?

But wait. On October 9, 2020, Gov. Greg Abbott released his Request for Legislative Appropriations for Fiscal Years 2022 and 2023 – basically, his draft budget for the next biennium. In it, he requested $45 million for TMIIIP: a slight drop from the $50 million over the last two years, but one in line with the request from the Legislative Budget Board that all agencies look for a 10% reduction in their general revenue request.

Cue a sigh of relief from the industry, and from Dallas Film Commissioner Janis Burklund. She, like many, feared TMIIIP would be a cost-cutting victim. However, rather than film, TV, and gaming being low-hanging fruit in the quest to trim budget, she said, "We're low-hanging fruit to get business in."

It all comes down to one number. $5.11. For every $1 the state gives as a rebate to applicants who submit audited accounts of proven in-state spending to the Texas Film Commission, Texas has already received $5.11 of proven spending. As Austin Film Commission Executive Director Brian Gannon noted, that's not just money into big production centers like Austin and Dallas, but "small towns that have been thrown off economically by COVID." While Amazon's upcoming series Panic was based out of Austin, it shot in Bastrop, Elgin, Georgetown, Lockhart, and Smithville. That translates to hotel stays and catering in small towns, and that doesn't touch on equipment rentals or hardware for sets (an oft-repeated statistic: Robert Rodriguez spent $600,000 on lumber to build Alita: Battle Angel's Iron City on his backlot at Troublemaker Studios, and that's money to Texas foresters). Gannon said, "They're buying food from all over the state. Lightbulbs are made in Corpus Christi for some of that huge rigging that they have. ... We're able to go to the Lege and say, 'Here's this mobile industry [that] was able to pivot and safely return, invested heavily in safety and making sure workers don't get sick, the general public doesn't get sick, and in doing so has injected money into multiple facets of Texas industry."

That's a pivotal point: While so many other industries struggled to reopen during the pandemic, the entertainment industry swung back into production fast. Animation and gaming companies shifted to work-from-home, and when the state gave the all-clear to in-person filming in June, the industry already had well-developed COVID-19 protocols in place to keep sets as safe as possible. "We can be part of the recovery program," explained Texas Motion Picture Alliance Communications Director Mindy Raymond. "Given the current climate, I'm feeling optimistic that our message is there, that we can bring much-needed money to the economy as well as jobs."

Since its establishment in 2005 as the Film Industry Incentive Program, TMIIIP has had a successful and scandal-free track record. In the most recent figures, released by the Texas Film Commission last September, over the history of the program nearly 1,200 projects have benefited from it. However, while TV and feature films were often the biggest recipients, netting around just over 10% of payments, they accounted for only around 4% of successful applicants. Commercial shoots accounted for nearly two-thirds of all recipients, and for Burklund that's a sign of a healthy ecosystem. Crews can pick up commercial and corporate work between TV shows like the Dallas-shot Cruel Summer and The Chosen, which is where the real money is. "Scripted shows keep our crew and our infrastructure here," she added.

After over a decade, those job-creating arguments have been made so successfully, and with such broad support, that the program is now seen as a smoothly operating engine of economic development. Both Abbott and his predecessor, Gov. Rick Perry, have been supportive of TMIIIP (Perry with flashy photo ops, Abbott quietly and behind the scenes), and half-hearted attempts by a handful of Republican lawmakers to dissolve it have gone nowhere. The argument is less about if incentives are necessary than how highly to fund them. Moreover, no one else is backing away from their incentives. Burklund said, "My first thought when [the pandemic] hit was that this was going to put an end to all incentive programs, but what I'm hearing is that some states are going the other way." All four states surrounding Texas are considering beefing up their incentives, especially as production in California is at a standstill and shows are looking for new homes. With incentives a key part of the calculation about where a production will be located, it seems all parties understand that Texas has to offer them to retain the shows it already has, never mind attract new ones.

The other side of the coin is that there are no discussions about revising the program, even if advocates see its flaws. It's not as generous as most other programs, and the fact that the coffers have to be refilled every biennial budget cycle leaves producers cautious that there will be anything left for their rebate. Smaller independent productions rarely benefit, because the cost of hiring a production accountant to file the necessary paperwork could cost more than any payment. Plus, there's the name: Texas Moving Image Industry Incentive Program. It's not really an incentive, which implies a payment to start production. TMIIIP is a rebate program, and Raymond noted that the TXMPA tends to informally refer to it as "production grants." Yet while she thinks there may be discussions about reforms in future sessions ("as with any program, after a decade you need to look at it") she cautioned that "if we do open up the statute, it has to be worth it."

For Raymond, the upcoming legislative session is all about stabilizing the program, backing the governor's $45 million request, and spending the next two years showing, yet again, that TMIIIP benefits Texas. "Then maybe next session we can have an increase."