Don’t Hollywood Texas
Why Legislators Should Reject Senate Bill 22 and its Gift of $2.5 Billion of Taxpayer Money to Hollywood
When the Texas House of Representatives come to order today, Sunday May 25, one of the first bills it will consider is Senate Bill 22, which creates the brand-new Texas Moving Image Industry Incentive Fund and gives $2.5 billion of taxpayer money to the film industry.
While Texas property tax owners are bleeding cash through higher and higher property taxes, the Texas electric grid is being overrun by renewables, and China is buying land all over Texas, bills that do anything meaningful to address these and many other conservative priorities are dead or on life support as the session draws to a close. However, legislation to make Texas more like Hollywood is one of the top priorities of the leadership of the Texas Legislature.
SB 22 sets up a massive, $2.5 billion taxpayer-funded grant program to subsidize movies, TV shows, and digital media projects made in Texas, taking $500 million every two years from state sales taxes and depositing it into a special fund outside the state treasury. The Governor’s office will use this fund to hand out grants to entertainment companies. The funding for the program runs until 2035.
The bill creates a large, recurring carve-out from state revenues, prioritizing corporate welfare for Hollywood-style projects over pressing needs like tax relief.
Pressure is mounting on fiscal conservatives in the Legislature to vote for SB 22. They are being told that the $500 million cost of the bill is already appropriated in Senate Bill 1, the budget bill, and that SB 22 at least puts a few guardrails around how the money is spent.
The problem with that claim is that it is not true, or at best is only 20% true.
In the Senate version of SB 1, there are contingency appropriations based on the passage of SB 22. However, they actually total a negative $42 million. The House version shows $155 million for the Texas Moving Image Industry Incentive Program (a program that already exists and is different than the new fund being created under SB 22), but that is in Article 11 of the bill, a section that does not actually authorize spending. Thus, if the appropriations bill does appropriate the $500 million, it will likely be in the conference committee report, a version of the bill that almost no one has seen yet.
The important thing to note, however, is that there is no need for SB 1 to appropriate any money for this program because SB 22 already directs the spending of $500 million this biennium plus another $2 billion through 2035 with NO appropriation from the Texas Legislature.
SB 22 makes three fundamental changes to Texas law that ensure $2.5 billion of taxpayer money will be given to Hollywood through 2035.
First, SB 22 creates “the Texas Moving Image Industry Incentive Fund … as a fund outside the state treasury to be held and invested by the trust company and administered by the office.” This is a brand new fund that puts the money largely out of reach of future Texas Legislatures and the normal accountability processes of handling state money.
Second, SB 22 requires the Texas Comptroller to, “not later than the 30th day of each state fiscal biennium, … deposit to the credit of the Texas moving image industry incentive fund … $500 million of the proceeds from the collection of the” Texas sales and use tax. This provision expires on August 31, 2035, meaning that the transfers of $500 million will take place in September of 2025, 2027, 2029, 2031, and 2033, a total cost to Texas taxpayers of $2.5 billion. These transfers will only take place with the passage of SB 22; they are nowhere to be found in SB 1.
Third, SB 22 changes Texas law to allow “money in the incentive fund [to] be spent without legislative appropriation.” Thus, when the money is transferred to the Texas “Hollywood” Fund, no appropriation is required for the Governor’s Music, Film, Television, and Multimedia Office to spend the money at its discretion. A few safeguards are in the bill, but they are generally already being followed in practice by the office.
At most, some version of SB 1 might allow $500 million to be spent to make Texas like Hollywood.
But only SB 22 ensures that $2.5 billion of Texas taxpayer money is given to the film industry for movies and other productions made in Texas.
Texas legislators should reject SB 22. Not just because it is corporate welfare at its worst or because of its high price-tag, but also because Texas taxpayers’ hard-earned money should be spent on tax relief, not Hollywood millionaires.
Texas legislators should vote NO on SB 22 and respect the taxpayers who put them into office.