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Apr 23, 2009 - Perry Signs Bill to Provide Incentives for Entertainment Industries

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Michael Schrengohst

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Apr 23, 2009 - Texas Gov. Perry Signs HB 873 to Provide Incentives for Texas Entertainment Industries

LINK - NEW Texas Moving Image Industry Incentive Program


AUSTIN - Gov. Rick Perry today signed House Bill (HB) 873 by Rep. Dawnna Dukes and Sen. Robert Deuell, which promotes the entertainment industry in Texas by providing incentives for the film, television, video and digital interactive media production industries.

"The passage of House Bill 873 is an important step in helping Texas regain its footing in the moving image business," Gov. Perry said. "With this legislation, we are strengthening our state's investment in a vital industry that not only shows off our state to the rest of the world, but also draws investment and creates jobs for Texans."

The governor was joined by lawmakers, filmmaker Robert Rodriguez, members of the Texas Motion Picture Alliance, and representatives of the film, television, commercial and video game industries from across the state at Rodriguez's Troublemaker Studios for the signing.

Texas has lost approximately 7,000 crew positions and $500 million in production spending to states with more competitive film incentives, such as New Mexico, whose feature film and television productions contributed $242 million to its state economy in 2008, and Louisiana, which earned $350 million in production in 2007. Currently, about 25 percent of Texas-based film professionals are working in these states, some starting to relocate permanently.

The moving image industry has brought more than $1.2 billion dollars to the state in the past 10 years. Gov. Perry noted that these investments would not only boost the entertainment industry in Texas, but would also indirectly affect other industries and businesses that support these productions.
 
I don't think this is good for Texas' economy as I think most subsidies/handouts are a bad idea.

Canada also subsidizes its film/tv industries (and to a very high degree for domestic productions, much less so for foreign)... I don't think it works out too well for us. You will see industry cycles causing unemployment, and people trying to get into the industry are not very "employed" / get paid very poorly.

Sure the business is sexy (and I think this is the main reason why so many politicians get on the bandwagon), but I don't think it makes economic sense.
 
The more states that offer these incentives the less incentivized they become.

The incentives don't make much of a different as to whether or not a project should be shot. Just where it should be shot.

The number of productions seems relatively stable--once everyone offers an incentive then productions will recentralize where the talented crews and existing infrastructure already are. If everyone gets the same deal make the choice becomes one of convenience.

There's certainly a point of diminishing returns. That being said... for the time being I've seen a study by the Washington State film commissioner's office which demonstrated a positive economic impact which payed the tax breaks and grants off.
 
That being said... for the time being I've seen a study by the Washington State film commissioner's office which demonstrated a positive economic impact which payed the tax breaks and grants off.
Click to expand...
The cynic in me wonders if they commissioned a report with the 'right' results. BC for example had a report saying that their subsidies were not justified.

But here's an example of silliness/waste caused by subsidies. In Ontario, you get a bonus for shooting in regional areas / outside Toronto. So if you have a project that is set in Toronto, you can save money by shooting it in Hamilton (small nearby city)... even though Toronto has better facilities, your crew has to waste extra time driving to and back from Hamilton, etc. etc.
 
Far better to give good tax breaks on profits from productions (encourages the making of movies people want to see) rather than subsidies, which encourages companies to exist that are good at getting subsidies... That and "not getting in the way" of people making movies. At least that's my personal opinion on the matter...

Graeme
 
Bottom line is the bottom line -- productions go where they get the most bang for their buck. I've done a couple of movies set in Texas but filmed in either Louisiana or New Mexico because those two states had tax breaks and Texas didn't. And I've shot three of my last four projects in Vancouver, one project set in Wisconsin and the other in Illinois, but Vancouver still worked out to be cheaper to shoot in, despite the fact that there were tax breaks in Wisconsin and Illinois -- but Canada has a weaker dollar, so that factors into the budget.

Now you can question whether having productions come to your state helps the local economy or not, but the incentives do bring productions that would likely go elsewhere. But it's always a race to the bottom, or bottom line, in terms of who's incentives are more attractive than others. Which is why you get movies set in Philadelphia being shot in Baton Rouge.
 
But Graeme, I don't think you can use that traditional business model on films. Normally, free market makes a company adapt a product or services as they go and the "best one" wins (usually...sorry Apple). Films, on the other hand, are done when released...a single product company.

That said, I don't want to only reward companies that "give the people what they want" because we'll wind up with 100 lousy Nick Cage movies every year. I am all for the encouragement of little movies that with some incentives might break through and beat the big boys, like the past few years: Little Miss Sunshine, Juno & Slumdog Millionaire.

I just wish the incentives were actually for challenging types of movies and not the blockbusters. But either way, if profits were the only measure, we would continue to get a lot more bad blockbusters and nothing more.

My $.02 (which is my own and not part of any gov't handout),

Kevin
 
On the other hand, up here in Canada, we all know that subsidies go to media projects that should not really have gotten any, but still the money keeps going to the same companies, who are experts at getting the grants.

Indeed, the situation should not be set up against independents, but I don't think tax breaks on profits is anti-indie, and obviously, I'd hope movies like Slumdog made a profit.

I've only seen the little bit of the industry here in Canada where the eligibility for grants seemed more to do with "who you know" and "who you party with, in Toronto and no-where else" than any measure of worth in the project itself.

Graeme
 
It's a classic problem that is not going to be easily solved -- movies are both a popular and profitable product and an art form that enlightens and educates, but is not always popular with the masses. Blockbuster movies provide a lot of work for people, and usually -- though not always -- a lot of profit for the distributors, and art films do not. And there are a lot of movies that fall between the two extremes, your typical indie like "Sunshine Cleaners" let's say.

And some people are going to say that public money should never go to the arts, especially non-popular esoteric works, and others who are going to say that the less-commercial arts can't survive without such support, and that society as a whole is enriched by having such artmaking going on.

But all of this is separate from the issue of tax breaks to encourage local film production. To me, it's more of a numbers game, are you getting more back than you are putting in, tax money-wise. If the tax breaks cause more money to flow into the state and more state residents to make more money and pay more taxes, and the whole thing works out to a net gain for the state as a whole, then I don't see the problem with it. Sure, it may be short-lived, but what in life is permanent anyway, even in work?
 
Despite crazy high taxes, doing film productions way back home in sweden is pretty low cost. Part because the good exchange rate from $, part because allot is unregulated from the unions. ...and part when you say your a film crew from the states, you get aloooooot for free :) ..but it is always enoying when all those blond women come and bother you :(
 
David, I think, is right. We have to distinguish between state or government arts' patronage, and the material value of subsidies or tax breaks basely solely on a production company's ability to finance a project in a favored location.

The benefits of the latter tends to depend on who's doing the math, and which interests are privileged or benefiting. Local property taxes might have to go up, or services to the poor might have to be cut, for example, to cover the tax shortfall on subsidies or tax breaks for movie productions. So local caterers or rental houses serving the movie industry might benefit, but others will lose.

However, the idea that tax cuts invariably increase revenue is folly. Somebody has to pay for it, somewhere. It's just a question of getting a temporary advantage.
 
While I agree with you David, I just wish that was equal support from the states on the "homegrown" level.

When I lived in Austin, I went to board meetings regularly and they were always focused on these incentives to bring giant films in that would provide work for a few months and then be gone. That's all they were after. The ironic thing is that Austin is home of a few homegrown filmmakers that have given back a TON to the Austin community, marketability AND economy with Richard Rodriguez and Richard Linklater. Yes, installing some incentives into the local filmmaking community is less of a gamble than giving tax rebates to the next blockbuster that wants to shoot in your state, but it still seems like a better long-term vision and well, much cooler to support the local guys.

But again, I see your point and agree in principle...if it brings in more for the state than put out, it's a good business decision.
 
The other interesting question here is, with half of Texas Republicans reportedly favoring secession, and Perry himself refusing to discount it thanks to Obama's reputed socialism, why is Perry offering state money ("with this legislation, we are strengthening our state's investment in a vital industry") to movie producers?

"Our state's investment"? What is this? Texas communism? Did Nicaragua take over Texas, after all, in the 1980s?

Nobody could have ever invented this stuff.
 
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