When Texas Lt. Gov. Dan Patrick says he wants to provide half a billion dollars for incentives to get film and TV production to move to Texas, the first response for most people would be to presume they misheard him.

But that’s exactly what happened this week when he issued his draft budget for the 2026-7 biennium. Alongside the normal spending plans for education, transportation, etc., and conservative talking points about border security and tax cuts, was this intriguing spending item:

$498 million to revamp the Texas Film Incentive, making Texas the movie capital of the world. It will consist of two parts: $48 million in grants for small films and TV commercials, and up to $450 million in new tax credits, including Texas residency requirements for workers. Texas gets $4 back for every $1 invested while creating new jobs for Texans

Now, there are lots of devils in even the scant details that have been laid out here. First of all, there is not nor has there ever been such a thing as the Texas Film Incentive, so the presumption here is that Patrick is talking about the Texas Moving Image Industry Incentive Program (TMIIIP to its friends).

Founded in 2005 as the Film Industry Incentive Program, it was revamped in 2007 to cover a wider swath of industries than just film, including TV, commercials, educational and workplace training videos, and gaming. If anything, these are a bigger part of the program than feature films because of a key feature of TMIIIP: a minimum in-state hiring requirement. Basically, 70% of your cast and crew had to be Texas residents. A visiting big-budget movie production is generally going to bring its own crew with it for the few weeks of filming, but a TV show or a game developer will hire locally because they’ll need them for years.

Second, $48 million for “small films and TV commercials.” Now, this is where the numbers get tricky, so bear with it. That $48 million is just $3 million over what TMIIIP was allocated last session for the 2024-25 biennium. That was in the regular budget, House Bill 1. However, the legislature allocated an extra $155 million via the supplemental appropriation bill, bringing the total allocation to $200 million.

Good, right? Well, maybe. Supplemental appropriations are a one-off, and so industry experts feared that the extra $155 million would disappear this year. So it’s good news/bad news that Patrick is proposing losing the $155 million in supplemental spending, but adding $3 million and ringfencing that for small films and TV commercials, meaning it won’t get immediately gobbled up by a handful of big projects.

So what about that new $450 million? That has to be good, right?

Well, maybe, maybe not. Initial discussions indicate that this may just be an extension of TMIIIP, but until anyone sees any legislation there’s no way to know that. What Patrick seems to be talking about here is a completely new program, with no guarantees about the tried-and-trusted elements that have distinguished TMIIIP. That’s a lot of money to start handing out via tax credits through a program that no one seems to know anything about yet, and that’s maybe the biggest issue. TMIIIP is not a grant but a rebate: Productions only get the money after production is completed and they have submitted their books to be fully audited by the Texas Film Commission. Who knows how these tax credits would work?

That said, industry insiders are optimistic about the proposal. First, it’s a pleasant change to not have Republicans looking to cut the program, but actually add more money in. Second, having the allocation for small films and commercials makes them more viable. But the biggest benefit is that tax credits would not be reliant on the state’s general revenue fund being allotted by lawmakers every session. Over the last two decades, the cash in the kitty has fluctuated wildly from a low of $22 million to that $200 million high with seemingly no rhyme or reason. Tax credits don’t pull from general revenue, so the budget arguments decrease.

Now, the immediate and obvious question is: Why is notorious reactionary Patrick suddenly interested in the movie business?

Historically, it’s been the governor’s office that has been the big booster for production incentives (Gov. Rick Perry publicly so, Gov. Greg Abbott in a more behind-the-scenes fashion). Patrick started to get interested last session because of his increasingly close friendship with Yellowstone creator Taylor Sheridan, leading to the joke that the program should be renamed from TMIIIP to TSIP – the Taylor Sheridan Incentive Program.

It was seemingly Sheridan who helped push Patrick around to the extra $155 million last session, but also Sheridan who pushed to slash the Texas residency requirement from 70% to 55% (word was he actually wanted 25%-40%, but that was too much for TMIIIP advocates and fiscal conservatives to swallow). Sheridan has been known to publicly gripe about how he can’t find enough cast and crew in Texas (to which everyone in the industry curtly replies “Well, maybe if you tried looking?”), but it’s such a hot-button topic around lawmakers that it seems logical that Patrick would have to include some residency requirement reference in this initial outline. But will it be 70%, 55%, or 25%?

The expectation is that Patrick’s close ally and Senate Finance Committee Chair Joan Huffman, R-Houston, will introduce a bill containing this new tax credit program. It’s also expected to have support in public testimony from new lobby group Media for Texas, which was formed to advocate for tax credits. But just because it’s got two of the heaviest hitters in the Senate onboard, that doesn’t mean it’s going to be plain sailing.

First off, fiscal conservatives aren’t fond of tax credits, and the concern is that, if the film business gets them, every industry will want them. Secondly, the most famous production tax credit program is the one that helped build the Georgia film and TV business – but it’s been so controversial that last year Georgia lawmakers discussed capping or even dismantling the program. Legislation to introduce a yearly cap failed after the House and Senate failed to agree on details, and that points for another problem for Patrick: He’s in the middle of yet another feud with the Texas House, which may not be in the mood to do his pet projects any favors.

Finally – and this may be the most important factor – if Patrick wants to put $500 million into incentives, why not just put it into TMIIIP, a popular and proven program with a 20-year track record of success in attracting businesses and creating jobs?

Oh, and let’s not forget that Patrick’s seemingly completely forgotten about the gaming industry, which has been a major beneficiary of the program.

But beyond the idea that this is a great way to funnel a huge amount of cash with less accountability and requirements to a certain Western-obsessed TV producer, there’s a darker concern about Patrick’s plan.

One thing TMIIIP doesn’t really have is rules about content, so it doesn’t matter whether you’re making Magnolia Table or Mongolian Death Worm. As long as you could prove you hit the in-state spending and state hiring requirements, you’re golden.

The only exception is a rule added in 2007 that you can’t make Texas look bad. This rule has rarely been used (one notable exception being when a racist campaign, instigated by Alex Jones, screwed Robert Rodriguez’s Machete out of its rebate). Now, it would be very hard to get TMIIIP rewritten to add any content restrictions in there. But a new tax credit program? That’s a different story, and there’s increasing concern that Patrick is looking at creating a half-billion dollar war chest for the culture wars. At an October hearing of the Senate Finance Committee, speakers including Sheridan and Dennis Quaid muttered obliquely about Hollywood Babylon while lawmakers complained about swearing onscreen and unions on the lot.

So the question is, when Patrick says he wants to make Texas the new Hollywood, does he mean a place where dreams of stardom and big commerce intertwine, or Reliance-Majestic Studios, where notorious racist D.W. Griffith felt safe to churn out his neo-Confederate propaganda?