Over the next 10 years, $1.5 billion in film incentives will be up for grabs across Texas, marking the largest amount of funding in the state program’s history.
Film projects that begin after Sept. 1, when Senate Bill 22 goes into effect, will have the opportunity to apply for a grant rebate of up to 31% of the production’s qualified in-state spending.
“We are really trying to establish a very family-friendly, faith-based, filming opportunities that really portray Texans in a positive light and provide great economic opportunities to all Texans,” state Sen. Joan Huffman, a Houston Republican, said ahead a vote on the bill earlier this year.
Huffman authored the measure, which allocates $300 million to the program every other year through 2035.
While filmmakers have celebrated this funding increase, the program also has its skeptics.
“Why would this industry be more profitable and have a higher return of investment than any other industry?” said Michael Ward, professor of economics at the University of Texas at Arlington.
New money for an old Texas film program
The increase in funding is new, but the program is not. The Texas Moving Image Industry Incentive Program, or TMIIIP, has been around for nearly 20 years. It was created in 2007 and first funded in 2009.
As its name might suggest, the program isn’t just for film: television shows, commercials, animation projects and even Texas-made video games are also eligible to apply.
To unlock the funding, productions must spend a certain dollar amount in state (the number varies based on the project's total budget). They are also required to meet a quota of in-state staff, cast and crew members and complete 60% of the project in Texas.
Checks aren’t cut until after the production ends and its documentation of receipts, pay stubs and other fees have been audited and approved.
Prior to the passage of SB 22, the budget for the program was subject to change with every two year legislative cycle. Filmmakers and studios said that made it difficult to plan.
For instance, the Texas Legislature in 2017 set the funding at $32 million for the upcoming biennium. But during the 2023 session that number climbed to a total appropriation of $200 million.
“We never knew in two years how much they were gonna put in the incentive funding,” said filmmaker Elizabeth Avellán, “So that was always my conundrum.”
That uncertainty meant that some Texas stories were being filmed in other states, like Georgia or Louisiana.
But proponents of the Texas film industry hope this new increase in funding brings those productions — and stories — back home.
The massive investment the legislature made this year is thanks, in part, to a coordinated push from the Texas filmmakers and actors. Stars like Matthew McConaughey and Taylor Sheridan even took their cause to the Capitol earlier back in March.
But Avellán, who has been working on film projects in the state since the 1990s, said it will also help small filmmakers too.
“It’s hard because you wanna film in Texas, but you kinda need a little boost,” said Avellán. “Especially those smaller budget films that have filmmakers that are just starting their careers.”
The return on investing in Texas films
The state, along with proponents of the program, say that for every $1 spent through the Texas Moving Image Industry Incentive Program, the state sees a $4.69 return on investment.
“Which is…a silly number,” said John Diamond, director of the Center for Tax and Budget Policy at Rice University’s Baker Institute. He’s one of several economists who question those figures.
“There's just no chance that it's that large,” he told KERA News.
For a more accurate look at how effective film incentive programs are, Diamond said, one has to consider opportunity costs. Every dollar has a potential multiplier effect.
“You should be measuring the rate of return across opportunity cost, and picking the one that has the best return,” Diamond said, instead of just “looking at a single one and saying, ‘Hey, this has this big positive impact.’”
For example, leaving that money in a taxpayer’s pocket, according to Diamond, could also have spillover effects to other industries when they use that money to buy goods or services that might not have been purchased otherwise.
“If you're a Texas politician and you support this and there's some uptick in spending, then you can turn and say, ‘You know, I supported this and filming went up in Texas by this amount, and I'm bringing jobs to the state,’” Diamond said. “At the same time, we can look across well-done studies that look across all states and compare states that have passed incentives with those that have not. The findings are pretty clear that the impacts are really small at best.”
Another thing economists point to: Dozens of states now have similar film incentive programs. According to UT-Arlington economist Michael Ward, when states are competing against each other for the same productions, it’s the filmmakers who ultimately win.
“One of the problems with having lots of states do this is that you're just competing for the same projects,” said Ward. "And it's a race to the bottom: Who can outbid who and for getting projects produced in the state?”
‘Whose family values?’: Not every Texas production will be eligible
Of note for any productions looking to reap the benefits of this new influx of funding: The state’s film office can deny any project that has “inappropriate content” or “content that portrays Texas or Texans in a negative fashion.”
State Sen. Sarah Eckhardt, an Austin Democrat, shared her support for the incentives earlier this year on the Senate floor, but expressed concern with the subjective assessment of whether or not a project promotes Texas values.
“Of course, whose family values would always be the question,” she said.
In response, Sen. Huffman, the bill’s author, pointed out that program applications have always been subject to a review. Now that process is just codified in the law.
The state’s program also provides additional grant incentives for productions that take place in rural areas, hire Texas veterans or are faith-based. Texas heritage, historic site and workforce development grants can also be stacked with the other incentives.
The cultural capital
For some Texans, one factor that can’t be left out of the equation: The cultural capital that comes with making the Lone Star State a film hub.
“If you can tell a good positive story, the return on investment is really more than just dollars,” said Michael Carroll, professor of economics and director of UNT’s Economics Research Group “It's reputation. It's perception.”
The investment is also an indication of values, said San Antonio based filmmaker Andrew Gonzales.
“It shows that Texas cares about filmmaking and understands the economic implications by giving these incentives and bringing creatives to make things here in Texas,” he said.
Texas Movie Bistro in Lake Worth recently hosted a premier of the extended cut of the documentary Gonzales directed and co-produced.
It is likely one of many premieres to come over the next decade.
