Texas Legislature to consider larger incentives for filmmakers

12:00 AM CST on Friday, January 2, 2009

Joe O'Connell filmnewsbyjoe@...

Are financial incentives for filmmakers a good idea, and can they save
the Texas film scene?

Those are the operative questions as the Texas Legislature revs up this
month with a proposal from Gov. Rick Perry to nearly triple the state's
fledgling incentives program.

Hard figures won't be out for a week or two, but 2008 generally is seen
as a down year for the state's film industry.

"They stayed away in droves," says Bob Hudgins, head of the Texas Film
Commission. They being Hollywood studios that have bypassed Texas and
its 5 percent rebate on spending in favor of states such as Michigan
that offer up to 42 percent incentives through tax rebates or direct
cash returns.

North Texas' saving graces were television commercials, reality
television, video games, small independent films and longtime heroes
such as the PBS show Barney and Friends.

"Truthfully, it could have been a whole lot worse," says Janis Burklund
of the Dallas Film Commission. That's despite the loss of Prison Break,
which moved production to Los Angeles after two seasons (the second one
truncated by the writers strike) in Dallas.

Look for the Texas Motion Picture Alliance to push to increase the
state's incentives to 15 percent, a number not so quietly touted as the
point of equilibrium given Texas' established crew base and varied
shooting locations, particularly in the filming hubs around Dallas and
Austin. Perry is proposing boosting the two-year incentives budget to
$62 million, a $40 million increase over the 2007-08 authorization.

But the watchdog group Texans for Public Justice, in a recently released
report (see www.tpj.org/watch yourassets/film), says multinational
corporations are the true beneficiaries, particularly of rebates given
to television commercial shoots. Hudgins says that's dead wrong and that
the group's study was biased. "For the most part, Texas-based production
companies benefit," he says. "That's a fact."

Meanwhile, some bigger-spending states also are taking second looks at
film incentives. In New Mexico, which offers 25 percent tax rebates, the
Legislative Finance Committee commissioned a study that found each
dollar of rebates returned only 14.4 cents in tax revenue; some there
have suggested a $30 million yearly incentives cap (roughly what Perry
is proposing in Texas).

In Louisiana, which also offers a 25 percent tax rebate, critics have
balked at the $27 million – including part of Brad Pitt's salary – owed
for The Curious Case of Benjamin Button.

In Texas, the $22 million total approved for the first two years of the
incentives program in 2007 didn't get many takers outside of commercials
and the television series Friday Night Lights and Prison Break. (The
latter stands to get just more than $1 million back from $17.4 million
spent before closing shop in North Texas.) Prison Break also employed
more than 1,000 people, which the state calculates as the equivalent of
200 full-time jobs.

With little interest from Hollywood, $8 million of the $22 million could
end up unspent, Hudgins says.

In its current state, Texas' program brings in $27 for every incentives
dollar spent, he says. Under an expanded program, the big return still
probably would come from commercials and video games, while feature
films incentives may have a hard time breaking even.

Then why increase incentives? Hudgins is guessing at a $400 million
increase in filming activity in the state, including feature films and
network television series work, as a result of greater incentives.

Plus, he sees creative vision losing out to the cold, hard bottom line.
Even stalwart Texas filmmakers such as Robert Rodriguez, who has built a
film studio near Austin, are facing studio pressure to shoot where
incentives funds flow deeper.

With increased Texas incentives, Burklund says, she sees "no reason we
can't blow the socks off of other states, and they know that."