A tax break for Texas honky-tonks?
Venues seeking relief for ‘music incubator’ to preserve industry
The Texas dance halls and honky-tonks that launched such legends as Willie Nelson, Waylon Jennings and Lyle Lovett are turning to the state government to help them keep the pipeline of music stars flowing from the Lone Star State.
Independent music venues have organized and are asking the state Legislature to pass a bill that would give back to the venues a portion of alcohol sales taxes that they pay. The money would go into a $10 million “music incubator” fund to help honky-tonks pay for booking live music, promotions and venue upkeep. Venues and music festivals could apply for up to $100,000 worth of alcohol and sales tax rebates.
Musician Pat Green is among those who have put down their guitars and headed to Austin to testify at committee hearings and lobby lawmakers on the concept. He said he’s worried that the financial pressure from rising rents and property values are squeezing out iconic music venues that are part of Texas lore.
“The music business is such an enormous part of the state of Texas and the identity of the state that it is important that we give our local owners a leg up,” said Green, a San Antonio native whose song “Wave on Wave” reached No. 3 on the county music charts in 2003.
In Austin, one of those famous venues, Threadgill’s, closed its downtown location in 2018, citing
escalating property taxes and increased operational costs. Green said others are struggling to hang on too, especially in rural communities. He said places such as Gruene Hall, Floore Country Store in Helotes, the Broken Spoke in Austin and the Backyard in Waco are where new musicians are cutting their teeth to keep the state’s rich music tradition alive.
“It gives the small and medium music venues in the state of Texas a fighting chance, especially in the rural areas,” said Green, who is part of a group that owns The Rustic, which operates in Houston and other Texas cities.
Green said the program is aimed at venues with a capacity of 3,000 or fewer, and there are protections to make sure the money is going only to bars and clubs that truly promote Texas music. Specifically the legislation requires eligible venues to have been around for at least two years, have contracts with musical performers that give them a portion of ticket sales or an advance fee, and market their venue as a live music location, among other criteria. Green said they want to make sure that some bar doesn’t try to get the rebates by just putting a guy with a guitar in the back.
“Without stepping stones like those places, there is no way I would have made it to playing places like the Astrodome,” Green said moments after personally pitching Lt. Gov. Dan Patrick outside the Senate chamber.
The venues are not limited to just honky-tonks. Any venue, regardless of the type of music, could get the rebates on their alcohol sales taxes if they meet the criteria spelled out in the bill. Music festivals could get the rebates, too, but only if they are in a county with fewer than 100,000 people.
The bill, sponsored by Rep. Geanie Morrison, RVictoria, has already sailed through the House, but has struggled to advance in the Senate. The bill had its first hearing in the Senate last week, but has yet to be voted on with just a week remaining in the Legislature’s session.
The bill has opposition from the Texas Public Policy Foundation, a conservative group based in Austin. Carine Martinez, a policy analyst for the TPPF, testified against creating the music incubator program, saying it would be an example of the government trying to pick winners and losers in the marketplace.
To help those local venues and other businesses, she said, the state should be trying to lower property taxes, not create a new rebate program that benefits some businesses over others.
Rebecca Reynolds, of the Music Venue Alliance, said dance halls and honkytonks aren’t asking for a government subsidy, but just a break on the taxes they are contributing through the economic impact they are creating from tourists and others visiting the state for music.
Sen. Carol Alvarado, RHouston, said she still thinks House Bill 2806 can get moving in the Senate.
“Unfortunately, Texas music venues are now disappearing because of increasing operations costs,” Alvarado said.