Film incentives

Stuff like this always fascinates me.

In a legislative session marked by a slew of high-profile budget cuts, Texas lawmakers opted to continue offering [film and TV production] incentives, but they reduced the amount available by 50 percent. They approved $30 million to use over the next two years, according to Gov. Rick Perry’s office, down from $60 million in the previous biennium.

“Austin’s biggest competition is New Orleans and Shreveport,” said Rebecca Campbell, executive director of the Austin Film Society. “Productions don’t have to wait in a holding pattern while legislators review the law each session, which gives Louisiana a tremendous edge, with 10 films in New Orleans at the moment.”

State Rep. Dawnna Dukes, D-Austin, was among those pushing this session to keep incentive funding at current levels.

“The Texas Moving Image Industry Incentive Program has been extremely successful,” Dukes said. “I am unaware of any other economic stimulus program in the state or the country with such remarkable and proven results, especially in such a short time frame.”

The incentives have had an especially big impact on the Austin area, Dukes said, with more than 100 local projects receiving some sort of state support.

“The 50 percent reduction will certainly slow down the program and its positive outcomes by reducing the number and size of grants which can be awarded,” Dukes said. “Studios and producers are reluctant to start new projects in Texas for fear that the incentive grants will disappear quickly.”

But plenty of projects continue to wind up in Texas, Perry’s office points out. An April report from the Bureau of Business Research at the University of Texas’ IC2 Institute found that $58.1 million in incentives had been awarded between Sept. 1, 2007, and Dec. 31, 2010, with a total economic impact of $1.1 billion and the creation of 10,000-plus full-time jobs.

The Bureau of Business Research’s website is here, and their fairly short report is here (PDF). Note that video games are part of the package. I personally remain skeptical, but perhaps you’ll be persuaded. Mostly, I think these sorts of incentives represent a large public subsidy of various industries that generate no net economic output on a national level. It just moves stuff from one place to another, benefiting one state at the expense of another, while reducing total tax revenues. How many of the movies, TV shows, video games, and whatnot that receive these incentives would not have been made at all in their absence? Very few is my guess, since it’s not the marginal operators that get them. But that’s not the world we live in. What do you think about this?

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