Texas officials are criticizing a half-billion-dollar handout in the Senate’s preliminary budget proposal for films, television shows, and commercial marketing.
The Senate budget proposal includes $498 million to “revamp” current corporate welfare grants and tax credits to the moving image industry, a broad term that includes film, television, and commercial marketing.
Currently, the grants are dispersed via the Texas Moving Image Industry Incentive Program, which provides qualifying moving image productions—including video games and animations—a cash grant based on how much it invests in the state.
Tax credits available to the industry include the Media Production Development Zone Program, a sales and use tax exemption established in 2009 for the construction and improvement of media production facilities.
The industry also has sales tax exemptions for reselling props and costumes, fuel that is used off-road, hotel occupancy taxes, and items and services used in production.
However, the benefits outlined in the Senate’s preliminary budget could completely reform the current system.
The budget divides the subsidies into two parts: $48 million in grants for small films and TV commercials and up to $450 million in new tax credits. It is unclear whether the $48 million in grants will go toward the existing TMIIIP program or whether it will be replaced by a new one.
TMIIIP and its administration were allocated $45 million in the 2024-2025 budget. In 2023, another $155 million was temporarily allocated to the program.
Some state officials began opposing the grants and tax credits in the proposed budget after a commercial featuring actors Matthew McConaughey, Dennis Quaid, Woody Harrelson, Billy Bob Thornton, and Renée Zellweger was released on Wednesday.
The commercial, part of an initiative called True to Texas, features a segment in which McConaughey calls on the Texas Legislature to oppose Hollywood by encouraging the movie industry in Texas.
“The Texas government is proposing to have your property taxes be $500 MILLION higher… so they can give it to liberal Hollywood!” wrote State Rep. Brian Harrison (R-Midlothian) in opposition to the proposed spending. “I will oppose the liberal ‘Texas Moving Image Industry Incentive.’ Texans are overtaxed, and Hollywood doesn’t need your money!”
Agriculture Commissioner Sid Miller stressed in his post on X that Hollywood was already dying and productions “can’t get out of California fast enough.”
“Texas will benefit without subsidizing the folks that brought us woke, anti-Christian bigotry, socialism, transgenderism, etc,” stated Miller.
State Rep. Andy Hopper (R-Decatur) said he was a “Hard nope.”
“The success or failure of this venture does not, and should not, depend on government forking over your hard earned money,” wrote Hopper.
Taxpayer advocates are also warning against expanding the funding.
James Quintero, policy director of the Texas Public Policy Foundation’s Taxpayer Protection Project, said that officials “will have to consider which option produces the better result: greater government spending or a larger measure of tax relief.”
“If lawmakers want to know which is the better path, I’d challenge them to ask: What would California do? And then I would encourage them to do the opposite,” argued Quintero.
Andrew McVeigh, president of Texans for Fiscal Responsibility, explicitly called out the proposal as an attempt to expand corporate welfare.
“Many Texas taxpayers have a desire to challenge the liberal agenda and culture that emanates from the Hollywood establishment,” said McVeigh. “And so while the goal of the program, encouraging a stronger Texas film industry, is laudable, the way in which the legislature is seeking to go about it is fundamentally misguided.”
“If Texas truly wants to foster an environment where Texas entrepreneurs and artists can compete in the film industry, we must dismantle hurdles and barriers to entry—like high taxes and government regulations,” he continued. “Giving handouts to Hollywood with Texas taxpayer money is not the solution.”
The group Media for Texas, co-founded by Grant Wood and Chase Musslewhite, has been noted as one of the more prominent organizations pushing for more corporate welfare in the Texas moving image industry.
Lobbyist Kelly Barnes, who previously worked as a chief of staff for former State Rep. Travis Clardy (R-Nacogdoches), was hired by the organization last year.
Lt. Gov. Dan Patrick listed “Establishing Texas as America’s Film Capital” as his 22nd priority legislation for the 89th regular session.
To qualify for TMIIIP, moving image projects must have 55 percent of their paid crew and cast be Texas residents, and 60 percent of production must be completed in the state. That threshold used to be higher, and the planned legislation could lower it even further.
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