Craig Berlin of Texas Motion Picture Alliance Talks about the Austin Film Industry
I understand Texas is falling behind in the film industry. What’s your view?
Yes, other states started offering incentives for people to shoot there. As a result of that, Louisiana went from $20 million a year from 2002 to $640 million in 2006 and that’s just features and episodic TV. They are literally lined up to make movies there and they have no infrastructure but now they are building it. They have lured enough business there to do it. Same story with New Mexico. Michigan is now offering 42% rebate on in- state spending which is insane. 3 years ago Bob Hudgins, Texas Film Commissioner kind of pushed the panic button and helped put together a nonprofit trade association which we named the Texas Motion Picture Alliance and whose purpose was to establish a board, raise money and help pass incentives.
What is your background?
I was an actor in high school and college, became a producer in college and worked as one for several years but now I basically sell the stuff that other people use to make films. Apple has the majority in market share in video editing and audio editing so we sell Apple as well as professional video and sound recording equipment and supplies.
So you said Michigan had a 42% rebate. What are other states doing?
Louisiana is at about 25%. Now their system is very convoluted with an income tax rebate. Since most people coming in don’t pay Louisiana income tax, they have brokers so you end up at about 20% after the brokers get their cut. New Mexico is up there in the 20-25% range. The additional thing that Michigan has is some Canadian- like features such as credits for on the job training and some other peripheral benefits that are very attractive. Now this is not sustainable but the flood gates are open with Drew Barrymore and even Robert Rodriguez headed there for starters.
What does Texas offer?
Other than our 5% incentive, dead last on the list of states with an incentive program, we have a sales tax exemption on production supplies, which has been around for a while. There is a hotel sales tax exemption after a 30-day stay and free use of state facilities in some cases.
How does that add up?
If I am producing something then I buy tape or supplies directly related to running the camera then its sales tax exempt, as would be a rental and certain equipment purchases. So you can say 6% of that amounts to about 3% of your net spend on average. Unfortunately, most people tend to look at the front number and everything else is sort of ancillary.
What is the Texas MPA doing?
Our first year of the TxMPA’s existence we were successful in hiring one of the best known lobbyists in the state. We all have the bad taste for lobbyists but the reality is in Texas, the Legislature meets every two years, they literally get 5000 bills put in front of them, and very few of them get past. You want your legislation passed so you hire lobbyists. We are coming up on Round II this session and there will be more opposition and we’ll have to have a strong grass-roots effort along with our paid lobbying efforts to make something happen.
Why did you join?
I got involved because it’s about the whole state economy, particularly at Austin and to a great degree in Dallas and Houston. By the time you look at the amount of money that we have lost it’s into the billions. We were successful in passing a very underachieving 5% incentive which puts us on the incentive list but at the very bottom of all the states. It’s basically maintenance and ineffective.
What are you shooting for?
I want to get at least 15% incentive with a $40 million allocation. Consider the 15% with our sales tax incentive and the other things that we have to offer, the amount accrued and talent that we have. That puts us kind of in the 20% range so people will be able to consider coming here. So it will make us an viable choice again, because now if you are a money guy in Hollywood, Texas is not even on your list of options. Robert Rodriguez lives here, is a major TxMPA sponsor and yet is producing his next project in Michigan. Getting a higher incentive will be tougher because at that level, we cannot rely on a “revenue neutral” fund from the Comptroller; rather we have to be partially on the budget as well.
So what is the name of the group that you are with?
It’s called the Texas Motion Picture Alliance, which is a 501(c)(6). They are technically considered a trade association as we do lobby. It is my belief that all we are trying to do is bring more business to our state and that then benefits everyone in our state. It grows the tax base and brings jobs here. When these guys are in town they rent apartments, they rent cars, they eat at restaurants, and they buy clothing. They live here while they are here and they spend money. Good for the economy.