Starbucks Corporate Welfare Deal Will Cost Tennessee Taxpayers $15,000 Per Promised Job

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Tennessee Conservative News [By Olivia Lupia] –

With the approval of a $30 million FastTrack grant from the Tennessee State Funding Board for a new Starbucks headquarters in Nashville, residents, community advocates, and lawmakers continue to raise questions about the prioritization of corporate welfare over that of local businesses and residents of the state, especially as taxpayers are seeing exactly how many of their dollars are on the line.

The state’s large incentive is expected to cover about one third of Starbucks’ anticipated investment of roughly $100 million to bring 2,000 jobs, meaning Tennessee taxpayers will be on the hook for around $15,000 per job. 

But despite the promised investment and enthusiastic support from Gov. Bill Lee, the move has drawn criticism from all different factions of the community, including unions, politicians, and fiscal watchdogs.

“If Tennessee is already one of the best places to do business, why are taxpayers being asked to subsidize one of the largest corporations in the world, a corporation by the way that is cutting jobs and closing stores,” said Pamela Furr of Americans For Prosperity previously. “Government should not be in the business of selectively rewarding customers with taxpayer dollars because when government props up one company, it inevitably disadvantages another one.”

The skepticism about the grant has also reignited concerns about the state’s poor track record in clawing back grant monies from companies who have not held up their end of the deal. At least 70 times since the inception of the grants program in the 2010s companies that promised to create jobs in exchange for the government subsidies have failed to deliver, costing Tennessee taxpayers millions of dollars as those funds have not been recovered in dozens of cases. 

In just the past eight years, the state gave approximately 570 companies almost $758 million in tax dollars under the FastTrack program, equaling roughly $100 per Tennessee resident. The Department of Economic and Community Development has not been forthcoming with company names, how much money has been recovered from failed deals, how much those failed deals cost taxpayers, or why so many subsidy deals have collapsed, according to The Center Square.

Beyond the fiscal concerns, conservatives have expressed displeasure with the state’s facilitating the move of a company whose political and social leanings stand in direct contrast to many of their convictions and beliefs. And both labor unions and Starbucks employees themselves have scrutinized the coffee giant’s exodus from Seattle, citing previous unfair labor charges filed against the company and their pushback on the employee relocation strategy.

Three of Tennessee’s Republican gubernatorial candidates have varying stances on the issue, with two appearing generally opposed to the concept of corporate welfare and one championing Tennessee’s fiscal policies which helped entice Starbucks to the state. 

Monty Fritts, who is also a state Representative, said in an interview discussing Starbucks and other instances of corporate welfare, “That is outside the constitutional bounds. And moreover, when we have infrastructure issues, not just roads, but EMT services, the ability to keep volunteer firefighters, just down to those types of things, and we’re funding ball stadiums and stuff, it’s a problem for me.”

In another interview, Fritts, who has pledged to end corporate welfare if elected, said, “Part of the reason I ran for office is because I saw that we were sending $550 million dollars to a billionaire who owns a professional football team. I love football, but that’s not the taxpayer’s responsibility, that’s not the role of government…And we do that lots. We’re good with corporate welfare and the picking who gets to win and who loses by default. That is not the role of government. And part of that $59.5 billion dollar [state] budget, we could trim a large section of fat off that budget if we stop doing those things. And once you take that fat off of that spend, you can take the precision knife to the collection and let the Tennessean keep more of their own money.”

Congressman John Rose is also opposing corporate welfare, at least in the Starbucks case, calling the move “beyond the pale” in a social media post. “Who wants the State of Tennessee to give Starbucks $30 million to move here? Anyone? No one?” he wrote. “If we’re going to spend it, let’s use that money to give 600 Tennessee small business grants for $50,000 to expand or improve homegrown businesses. Or repair any number of our roads. Or improve our DCS accommodations for vulnerable children. “

In a recent campaign commercial he also criticized the company’s history of DEI initiatives and other anti-conservative positions. “We can’t let them change our state. Starbucks pushed DEI and weird transgender stuff. Now they want $30 million taxpayer dollars from us. No thanks,” Rose said. 

Senator Marsha Blackburn seems to have a different perspective on the deal, celebrating Tennessee’s fiscal policies during an appearance on a Nashville radio program. “I think Starbucks is leaving Washington state because it was so DEI, woke, ESG, high taxes, they couldn’t do business there anymore,” she contended. “There are other companies that are leaving some of these big blue states because it is not a business-friendly environment.”

“It’s like Starbucks got religion and they’ve decided they want to be in a red state. I mean look at us, we are low tax, we are light regulation, we are a right to work state, and of course they want to come here,” she added. “What you have to make certain is that these are smart deals, that there are going to be jobs for Tennesseans, that they’re going to be higher wages.” 

Blackburn said she understands that the state is anticipating recouping its $30 million investment within six months and that it will result in a $250 million overall payroll. 

There is no firm timeline for the company’s official move, and thus far job creation has only been promised “over the next few years.”

About the Author: Olivia Lupia is a political refugee from Colorado who now calls Tennessee home. A proud follower of Christ, she views all political happenings through a Biblical lens and aims to utilize her knowledge and experience to educate and equip others. Olivia is an outspoken conservative who has run for local office, managed campaigns, and been highly involved with state & local GOPs, state legislatures, and other grassroots organizations and movements. Olivia can be reached at olivia@tennesseeconservativenews.com.