Tennessee Economic Development Agency Wants $202.5M In Additional Funds Mainly For Incentives
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The Center Square [By Jon Styf] –
Tennessee’s Department of Economic and Community Development asked for $202.5 million in additional budget outlays for next fiscal year in its budget request meeting with Gov. Bill Lee and staff.
The largest portion of the budget increase was for $103 million in FastTrack grants, most of which go to companies that are moving to Tennessee or expanding in the state. Of that, $18 million was proposed as a recurring budget increase with $85 million being a one-time increase.
Commissioner Stuart McWhorter said that the department mainly uses the funds to “incentivize job creation” by offering publicly funded incentives to private companies who are willing to pay more than each county’s median wage for its new positions.
“We are very cognizant of the taxpayer dollars we use to incent these companies,” McWhorter said. “We don’t take that lightly.”
McWhorter said the department had given incentives to 420 projects during Lee’s first term, but didn’t disclose how much in public funding the department had given to each company.
When the department announces projects, it also doesn’t include the agreed-upon incentive. Instead, it adds that number to an online database 30 days after the project is announced.
In September, the state had committed to at least $60 million in FastTrack grants after committing more than $200 million in 2021. Economic studies have shown that large incentives across the country are increasing for companies but don’t lead to the promised economic benefits.
The 2021 FastTrack incentive total did not include the nearly $1 billion in incentives for Ford to build its $5.6 billion Blue Oval City electric truck facility outside of Memphis but did include $65 million in state funds for Oracle’s new base in Nashville and $60 million for the new Ultium Cells project next to General Motors’ plant in Spring Hill.
McWhorter also is asking the state for $45 million in increased funding for site development and infrastructure planning for shovel-ready sites such as the megasite outside of Memphis where Blue Oval City will be located.
None of the new sites will be to that extent but McWhorter said companies, especially automakers, look to have prepared sites where they can build quickly to get new products into the market.
About the Author: Jon Styf, The Center Square Staff Reporter – Jon Styf is an award-winning editor and reporter who has worked in Illinois, Texas, Wisconsin, Florida and Michigan in local newsrooms over the past 20 years, working for Shaw Media, Hearst and several other companies. Follow Jon on Twitter @JonStyf.
When will we ever learn. Getting businesses to open in underserved counties by paying them is so different than Nashville giving away the farm for the stadium. The businesses are coming to the southern states because of the onerous conditions they face in the north. The should be paying us for the privilege of coming here.