Economic and Fiscal Impacts of Texas’ Moving Media Industry
The moving media business – comprised of filmmaking, television production, commercials and video games/animation – has been targeted as a potential growth industry for the state of Texas, with the recently enacted Texas Moving Image Industry Incentive Program now in effect. Under this new program, the Texas Film Commission is expected to approve about $6 million in grants by the end of fiscal 2008.
In 2007, the moving media industry in Texas was quite small, accounting for a mere fraction of 1 percent of Texas’ trillion-dollar economy. Though the new incentive program should help attract additional film and video production spending to Texas, the industry at best might double its relative contribution to the state’s overall economic activity by 2011. The Texas Moving Image Incentive Program was affected by the Writers Guild of America strike from October 2007 to January 2008. The strike shut down all productions using scripts from writers in the guild. For example, “Prison Break” and “Friday Night Lights” stopped production during the strike, and several independent movies halted pre-production efforts while waiting for a strike resolution.
Our initial scan finds the program is breaking even in terms of generating new state tax revenues roughly equal to the value of the grants expected to be approved in 2008. Though we have no way of calculating the value of grants that might be awarded in the year 2011, based on our two growth scenarios industry spending should produce between $7 million and $9.4 million in new state tax revenues by that time. The growing market presence of the moving media industry in Texas will have economic benefits beyond the fiscal returns presented in this report.
To improve the state’s competitive position and its ability to attract new projects and companies, consideration should be given to increasing the percentage of qualified state spending that is eligible for grants under the Texas Moving Image Industry Incentive Program. Additional funding for university and community college based training programs in arts and technology could also enhance the state’s competitive posture. Finally, leveraging the Moving Image Industry Incentive Program with the Emerging Technology Fund and/or the Texas Enterprise Fund should be explored as a strategy for bringing new video gaming companies into the state.