Potential funding cuts could hamper Texas' Film Industry

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In the land of glitz and glamor – it's the green that makes the biggest difference of all.

And with several bill proposals targeting funding to the state's Moving Image Industry Incentive Program, film industry experts are concerned.

"Austin will lose its place as a destination to make production," warned Rooster Teeth co-founder Burnie Burns, as he discussed potential cuts to the program.

The Austin-based company employs 290 people - and has continued to grow since moving into a new facility, where it neighbors the Austin Film Society.

"If the incentive program gets cut back any further, we're constantly going to be under pressure to take our productions, and take them to other places. To other states, to other cities. You know we'll be under that pressure," Burns explained.

Rooster Teeth specializes in a variety of content - from animated shorts to video games to feature length films. And while Burns said he can't imagine a scenario where they'd ever leave town - the nature of the business makes it possible that job growth will suffer.

"Production companies the way they work, we can go make our shows anywhere. So we can take the jobs that we create, and we can create those jobs somewhere else. We've created 290 jobs here in Austin," Burns said.

Rebecca Campbell, the CEO of the Austin Film Society, shared similar concerns.

"It's really simple, it's arithmetic. So if the incentive, if the pool of funds that's available to offer rebates to films is smaller, there will be fewer films and there will be less economic impact," said Campbell.

That arithmetic breaks down like this:

In 2013, the program was funded at $95 million.

In 2015, legislators slashed it to $32 million.

The program allows for projects which meet certain minimum requirements - 70% of paid crew, cast members, and extras must be Texas residents, and 60% of total production must take place in Texas - to apply for funds based on money spent in a state.

That's determined on a sliding scale - the more a production spends, the more they're eligible to receive in reimbursements:

• 5 percent for projects spending between $250,000 - $1 million

• 10 percent for projects spending between $1 million and 3.5 million

• And 20 percent for projects exceeding $3.5 million.

There's an additional 2.5 percent available if a certain amount of the production takes place in a designated "underutilized and economically distressed area."

Separate from this specific program, specific cities also can kick in incentives - though it's typically less than 1%.

The potential funding cuts have also caused concern amongst the industry's crew members, like location manager Nick Thomas.

He recently worked on the film "Little Woods" in Austin – slated to be released next year.

"I would worry about not getting any consistent work and I would worry about my friends and co-workers," said Thomas.

Prior to moving here, Thomas worked in neighboring Louisiana. Their film industry suffered after legislation reduced available credits.

Here in Texas, lawmakers are looking to make further funding cuts, with some taking it even a step further.

State Senator Bob Hall's proposal would eliminate the incentive program altogether.

"Every dollar that's given to the industry has to be taken from the pocket from an individual citizen like yourself, that you lose your choice of where you want to use that dollar," explained Hall.

He added the bill was unrelated to the state's budget shortfall, noting he proposed similar legislation last session.

"This is not about the amount of money. There's never a right way to do the wrong thing. And government funding private industry to compete with other private industry is the wrong role of government," Hall noted.

Hall said it had nothing to do with the specific content being produced.

"It is all about the role of government, and what government should be doing. This is not a core function of government - to be funding private enterprise, one company to be competing over another," Hall explained.

Senator Hall pointed to other incentive-based programs he's taken issue with - ranging from the Enterprise Fund to the Major Events Reimbursement Program Fund.

Industry leaders said they're trying to educate lawmakers about the issue - asserting it has long-term positive economic benefits.

"The incentives program has generated $1.25 billion in economic impact. And that for every dollar that's been rebated to a film, that Texas has seen $5.55 in spending," said Campbell.

She pointed to funding cuts to the program as being responsible for the loss of production.

"Yes. I heard the Director of the Texas Film Commission cited $145 million in projects that have been lost in the last biennium. Personally, I can point to the TV show 'From Dusk Till Dawn' which relocated to New Mexico for its' third season. We had 'American Crime' which relocated to Los Angeles, and specifically cited their incentives program as being the reason they moved. And then there was the TV show 'The Leftovers.' So for sure, we’ve seen some flight, and it’s hurt us economically. And we’ve also had crew members relocate. We’ve had producers relocate to Atlanta and New Mexico," Campbell explained.

When asked if there was any truth to a "political backlash" - while balancing general liberal policies favored by many in the industry vs. a Republican-controlled state government, both Campbell and Hall rejected the notion.

"In my experience meeting politicians, in general everybody likes the movies. It’s great for your constituency, it brings fame to your town, it gets you headlines, it gets you that money. So I don’t think there’s really any aversion to the industry even with “liberal Hollywood politics.” I really think it’s just more that this idea sometimes that incentives are just not the way to go, and that’s why we’re pounding the message in – it’s a rebate. The money has already been paid out in Texas. So it’s just a portion of that that is being given back in order to attract that film," said Campbell.

"Absolutely not. It's the merits of the issue. It's exactly the same merits that we evaluate every bill that comes up.... we address it based on the issues. It has nothing to do whether it's Republican, Democrat, or even someone who has voted against every bill I've put up. It's the issue itself. And that's what this is. It has nothing to do with except the fact that this is not the proper role of government," Hall explained.

It should be noted that the program was funded at its highest mark under Republican Governor Rick Perry.

The incentive program covers film, television, commercials, video games, reality television, and special effects projects.

Despite the proposed bills, Campbell believes they have strong support from the Governor's Office to fund the program.

Two other lawmakers - Senator Konni Burton and Representative Matt Shaheen - have proposed similar bills this session. Both declined KVUE's interview requests.