Despite cutting spending, not raising taxes, and preserving the Rainy Day Fund, there were many areas of the state’s new budget that should have been improved – or eliminated – like film industry subsidies that fail to live up to their promises. A new national study finds many states are ditching such programs, and so should Texas.
According to their website, the Texas Film Commission was created in 1971 to “encourage the orderly development of the film, television, and multi-media production industry in Texas…”, but the truth is that it has failed to deliver any substantial long-term film investments in the state that would be expected with a program such as this.
Yet we continue to subsidize their production in Texas by offering as high as a 15% rebate on money spent in Texas and as high as a 29% rebate on wages paid to Texas residents when filming in “underutilized areas”, with no caps on the amount reimbursed.
For a state that takes pride in its limited government mantra, it’s amazing that the “Film Incentive Program”, i.e. corporate welfare for Hollywood, has lasted this long. Instead of trying to create government “incentives” with a program earning a terrible ROI, Texas should be competing with other states for film business as we do with all other industries: by lowering taxes and reducing regulation.
That’s been the model that’s made Texas the greatest state in the nation to do business.
Texas did in fact have a chance to defund this program and follow its small government principles when Freshman Representative David Simpson offered an amendment to HB 1 that would have moved nearly all funding from the incentive program into vocational/technical education. After his original amendment failed to garner enough support, Rep. Simpson again tried to instruct Conferees to the State Budget Conference Committee to move funds for the program to public education, nursing homes and libraries, but that recommendation failed 28-100.
What makes this especially disappointing is seeing how many states are getting wise to the lackluster performance of these programs. States that have now eliminated or defunded their film incentive program include Arizona, Arkansas, Idaho, Iowa, Kansas, Maine, New Jersey, and Washington (even more states have reduced funding levels for their respective programs).
Texas has been the economic leader of the nation, proving to other states that you can grow your economy, create jobs, and live prosperously by spending less and getting government out of the private sector. But when all the A-list celebrities come to town, we become too starstruck to remember that.
This should be one of the first programs we look to eliminate next session.
Dustin Matocha is the Social Media Coordinator of Empower Texans / Texans for Fiscal Responsibility.
Connect with Dustin on Twitter.