Texas Production Incentives: Will They Be a 2011 Legislative Target?

Recent budget shortfalls in several states have caused legislators there to try to repeal the tax breaks that entice movie, television and game productions to temporarily set up shop inside their borders. Indeed, the supposedly nonpartisan Tax Foundation has issued a report arguing for the "immediate discontinuance" of all such tax-funded programs nationwide.

Watch for an incentives-related battle in the Texas Legislature when it returns to session in January, 2011.

Thanks -- or no thanks -- to several factors, including Gov. Rick Perry's signature on a no-new-taxes pledge, legislators will have to deal with a shortfall of $11 billion to more than $15 billion in the state's 2012-2013 budget.

According to the Austin American-Statesman, "[b]udget cuts are already in the offing..." and "[s]tate leaders are expected to pull the trigger soon on about $1 billion in spending trims...." The cuts may mean layoffs of prison guards and smaller payments to Medicaid providers, including doctors and hospitals.

Meanwhile, some observers of the state budget's woes are predicting the Texas legislators will not be able to "cut their way out of the hole" starting next January, the American-Statesman reports.

Paranormal Inactivity on Taxes?

More revenues will have to be raised, which will be tough to do since Gov. Perry, a strong sympathizer with the Tea Party movement, has signed the Americans for Tax Reform pledge that supposedly requires him to oppose "any and all tax increases."

Legislators will be left with few options except to increase some fees and look for any tax credits, tax exemptions and tax exclusions that can be reduced or eliminated. Also, they will face decisions on whether or not to allow more gambling choices in Texas.

In the face of the massive shortfall, Texas' production incentives could look like just one tiny plum ripe for picking out of the budget -- unless movie, television and game producers can convince the lawmakers that a lot more state revenue is generated than is spent on the program. Many legislators will be on the lookout for anything they can eliminate or shrink without raising taxes or fees.

The Incentives Hurt Locker?

The state production incentives progam -- if it survives the budget cutters next session -- will need to be given stronger funding. And many low-budget moviemakers say that it needs to be revised. At a time when non-studio movie budgets are trending lower and lower, often down to $100,000 or even less, Texas still wants moviemakers to spend at least $250,000 in the state before tax breaks will be granted. Many indie movie makers feel frozen out of the state's incentives program. The budget levels need to be made lower, and additional provisions need to be created to encourage the development of low-budget, "indigenous" Texas movie, television and game productions.

The state program also needs to be revised to get rid of its ridiculous "negative fashion" clause highlighted in the news last year. The Republican-ramrodded clause, enacted into law in 2007, forbids Texas state incentives to any kind of film, TV or game project that contains "inappropriate content or content that portrays Texas or Texans in a negative fashion, as determined by the [Texas Film Commission] office, in a moving image project." This clause puts the Film Commission in a censorship position and leaves the doors wide open for neighboring states such as Louisiana and New Mexico to keep getting "Texas" projects that can't get past the "negative fashion" restriction.

Gearing Up for the Fight

On the Texas Motion Picture Alliance (TXMPA) website, the organization's president, Don Stokes, recently posted both praise for the state's current incentive program and strong cautions that the program will need to be expanded and justified during the 2011 state legislative session.

Stated Stokes: "I am happy to report that our Moving Image Incentive Program is proving its effectiveness at bringing jobs and dollars to Texas. Since the enhanced incentives were signed into law in April 2009, applications which account for over $225 million in new in-state spending. These projects have created over 12,300 industry jobs equating to over 1,800 full time jobs. All of this has been achieved with a commitment of just over $24.8 million in grant funds. I am unaware of any other program which has delivered these levels of results with an equivalent cost. These projects come from across the State and cover all segments of the industry. This is tremendous news and will be a vital part of our message going into the 2011 Legislative Session."

He continued:

"We cannot afford to let this positive news make us complacent. Now is the time to remobilize and renew our efforts. We will have to battle for continued funding of the program in the upcoming Legislative Session. News reports from the Capitol inform us that all State agencies have been asked to reduce their budgets and cut current and future spending. We have been lucky since our friends in the Governor's office have trimmed in other areas in order to keep our current funding intact. They believe in the value our industry brings to Texas but we will have to make our case anew in 2011. To complicate matters further, we will not simply be asking to retain our current level of appropriation, we will be seeking an increase. At current application levels we will exhaust our funds for this fiscal year well before the next appropriation year begins in September 2010. Those funds will most likely also be exhausted before our next appropriation is in place. The positive side is that we have shown that if the incentive program is funded we can bring in the work. What we will have to prove is that the jobs we create benefit the State enough to justify the funding."

Fade Out?

A prediction from Dateline: Oblivion. Looking at the negative numbers surging into the $11 billion to $15 billion-plus range, Texas legislators will be primed to cut first and ask few questions later. State representatives and senators who don't understand the production business (and that will be just about all of them) will again demand to know why Texans should pay Hollywood anything to bring (or "brang") their "terrible" projects here. With angry constituents and Teabag Rick haranging them about taxes, they won't be receptive to listening to promises and predictions, nor reason.

The pro-incentive lobbyists need to be out in force already, reaching everyone they can possibly reach. The fiscally small but positive news from the Texas incentives program must be clearly heard and understood well before the budget-cuts drumbeat starts pounding everything -- and everyone -- into submission.

--Si Dunn

-30-

Texas Needs to Rework Its Movie, TV and Game Production Incentives

The Austin American-Statesman gets it, and that newspaper doggedly is staying on the Texas Legislature's case, even if many Texas politicians and entertainment people seem to be paying scant attention.

"State officials shouldn't be cast in roles of movie producers, scriptwriters or fact checkers, yet that's exactly where Texas legislators have put them," the Statesman editorialized in its July 3, 2009, edition.

A Republican-ramrodded clause enacted into law in 2007 forbids Texas state incentives to any kind of film, TV or game project that contains "inappropriate content or content that portrays Texas or Texans in a negative fashion, as determined by the [Texas Film Commission] office, in a moving image project."

Apparently, only Utah takes a similar, thin-skinned approach to attempting to "protect" how that state and its people are portrayed in movies, TV shows and electronic games. The other 48 states apparently are happy just to encourage any and all entertainment companies to spend money inside their borders and let courts, lawyers and lawsuits handle any controversies arising over "accuracy" or portraying anyone "in a negative fashion."

The July 3 Statesman editorial stated: "Legislation that denies tax incentives to movies that put the state in a negative light puts Texas Film Commissioner Bob Hudgins in a situation that is as uncomfortable as it is untenable."

The Statesman called for the law to be rewritten "to remove the negative light criteria that Hudgins used to deny tax breaks to a movie about the 1993 raid on the Branch Davidian compound in Waco."

The Waco movie project might have brought an estimated $30 million to the state economy and created dozens of jobs for Texas movie workers who now have to commute to Louisiana, Oklahoma, New Mexico or other states to earn paychecks.

But the project about the disasterous 1993 Branch Davidian standoff in Waco should not be the only focus of opposition to the "negative fashion" clause in Texas' moving-image production incentives.

The bigger issue is how much the restrictions -- and the ongoing controversy over them -- may chill the overall movie, TV and game production business in the state.

Producers looking to spend money on entertainment projects that have Texas subjects or Texas settings may decide to go to other states, just so they can avoid all risk of running afoul of overly protective Texas legislators or a state film commission subject to political pressure and narrow-minded laws.

After all, with current movie, TV and game technology, "Texas" can be created almost anywhere. (Remember the controversy over the Civil War movie Cold Mountain, which partially was shot in Romania, with Romanian army troops serving as "Yanks" and "Rebs" and the Carpathian Mountains doubling as North Carolina?)

Some opponents of the Texas Film Commission ruling, including this writer, have voiced opinions that the Waco movie would be a work of fiction, no matter how truly "based on real events" it is, and the Texas Film Commissioner thus has been tasked by state legislators to censor fiction.

As the Statesman and others have noted before, some of the most successful and enduring movies about Texas, including Giant and The Last Picture Show, have not portrayed Texas and Texans in a positive fashion. Neither have movies such as The Texas Chainsaw Massacre and TV shows such as Dallas. But Giant and Dallas particularly have brought tons of tourism dollars to Texas and are still infusing cash decades later. And other movies and TV shows, including the definitely inaccurate Walker, Texas Ranger, also will pay tourism and "image" dividends to Texas for many years to come.

"Tax incentives should be given to projects that will have a positive impact on the state's economy," the Stateman declared in its July 3 edition. "The criteria ought be clear, and producers should understand that not everyone is going to get an incentive. Decisions on incentives should be based on the economic benefit to the state -- not on someone's slippery notion of what's negative and what's not."

The Statesman gets it and is keeping the ball rolling. Now, do any of the leading lights within the Texas movie, TV and game industries get it, and are they doing anything to help get the "negative fashion" clause eliminated as soon as possible?

Texas entertainment jobs are on the line at a time when every new job definitely counts.

-- Si Dunn

Fiction Is as Fiction Does: The 'Waco' Movie Controversy Rolls On

One essential point –- fiction -- keeps getting missed as criticisms and free publicity continue for the screenplay for Entertainment 7’s Waco movie project.

No matter how “accurate” anyone thinks it should be, a screenplay –- any screenplay -- is a fabrication, a “play” for presentation on a “screen.” And any movie made from the screenplay will be even more of a fictional representation, once the director, actors, crew and post-production specialists have added their own contributions to the finished product.

The ex-FBI agent who lashed out at the screenplay on the front page of the June 24 Austin American-Statesman certainly is free to criticize the “accuracy” of how he thinks people, places and events are depicted in the script. However, anyone who witnesses or takes part in an event will have his or her own memories, interpretations and opinions of what happened -- or did not happen. Even if a million video cameras had recorded every moment of the 1993 Branch Davidian standoff from all sides and angles, there is absolutely no way to create a screenplay that could get the standoff “right” in every person's view.

A screenplay compresses people, places, things, images and circumstances into a stylized structure with three acts. A screenplay tells a story, and that story always is fiction, even when it is based on “real” events.

Even unscripted “reality” TV shows are unreal. They are just one more form of fiction (bad fiction).

Speaking of “real,” the real result of Texas' controversial "Ogden provision" (ironically named, since Utah is the only other state with a similar, thin-skinned restriction) is that State Sen. Steve Ogden of Bryan, Texas, can take credit for creating new moving-image industry jobs…in Louisiana, Oklahoma, New Mexico and elsewhere. Those states, and almost any others including Utah, likely will have no qualms about hosting -- and profiting from -- movie, TV or game projects that portray “Texas or Texans in a negative fashion.”

Sen. Ogden got the "negative fashion" provision added to state law in 2007, the Austin American-Statesman says, "after controversy erupted around the Texas-filmed 2006 sports drama "'Glory Road,' which tells the story of 1966 Texas Western Miners, and, according to school supporters, exaggerated racism at East Texas State University."

It has been noted in the Statesman and elsewhere that classic “Texas” movies such as Giant and The Last Picture Show and TV shows such as Dallas probably could not qualify for current production incentives, because they sometimes depict Texas and Texans “in a negative fashion.” Yet those productions continue to bring tourism dollars to Texas and expand the state’s aura around the world many years after they disappeared from theaters and networks.

The Ogden provision puts the Texas Film Commissioner in the unenviable position of trying to verify the “accuracy” of fiction, a writing form in which anything goes, and to use that "accuracy" as one of the criteria for judging “negative fashion.” Some call this censorship or a state legislative attempt to override free speech provisions in the U.S. Constitution. Others just call it "dumb" and "bad business." Texas has had dubious reputations since at least 1835, yet it has managed to do quite well for itself, thank you very much.

Any movie version of the Branch Davidian standoff would be fiction. The standoff could even be staged in a parallel universe on the planet Yargon in the year 3456. But if the script portrayed “Texas or Texans in a negative fashion,” the project still might not qualify for state production incentives.

At the very least, the continuing controversy over Waco may cause many movie producers to consider spending their money and shooting their “Texas” movies anywhere but Texas, so they won't run afoul of state restrictions and state lawmakers.

As long as the 2007 “negative fashion” restrictions stay in place, perhaps the state’s famous “Don’t Mess with Texas…” slogan should be expanded. It could now include “…or We’ll Diss Your Screenplay and Keep Making Our Moving-Image Workers Cross State Lines to Find Jobs.”

-- Si Dunn

'Censorship' Issue Remains Alive in Texas Moving-Image Production Incentives

It's pretty much a cinch now that Entertainment 7's movie Waco will not be shot in Texas.

It could never pass the Republican-inspired legislative clause that denies Texas state incentives to any kind of film, TV or game project that contains "inappropriate content or content that portrays Texas or Texans in a negative fashion, as determined by the [Texas Film Commission] office, in a moving image project."

There wasn't much "positive fashion" for Texas or Texans in the 1993 shootout and standoff that left more than 80 Branch Davidians and law enforcement officers dead.

Louisiana appears to be the leading site candidate for Waco now, unless New Mexico or Michigan or some other state with strong incentives makes a concerted effort to grab the $30 million project.

Meanwhile, criticism of the Texas Film Commission's decision continues to float up in a few places. Here is one disappointed blogger's recent comments on the controversy.

Whether the producers of Waco formally applied for state incentives or not (as some of the producers' critics have stated), the controversial "negative fashion" clause remains in effect.

How long will it be before it rears up again and bites Texas' long-suffering moving-image workers on the butt? (Many of them, of course, were hoping to work on Waco.)

Many producers and production companies are now aware of the "negative fashion" restriction. They may not wish to run afoul of moralistic Texas legislators and a Texas Film Commission that has to follow the law and also rely on those same Chamber of Commerce-minded politicos for funding.

Almost any movie that can, or will ever, be made about Texas and Texans is going to come face to face with a plethora of "negative fashion" issues. And almost any other state in the nation is going to be more than happy to host a movie, TV show or game project that Texas officialdom doesn't want.

Texas' new moving-mage production incentives are helping bring some new projects to the state, and they are helping create some jobs. But the "negative fashion" restriction will end up costing the state a lot of money and a great deal of sorely needed good will in the moving-image industry.

Meanwhile, many Texas moving-image workers will continue commuting to Louisiana, Oklahoma, New Mexico and elsewhere to work on projects that could have come to the Lone Star State, if Texas was more concerned about making money than "protecting" its image (an utter impossibility since about 1835 or so).

The production incentives laws need to be changed by the Texas Legislature to remove the "negative fashion" restriction. Or, they need to be challenged in court on First Amendment grounds that they abridge "the freedom of speech."

Either way, they need to go -- soon.


-- Si Dunn

---

Si Dunn's second book of poetry, Anchoring, is now available through Lulu