Each New Job Commitment Incentivized By Tennessee’s FastTrack Grant Cost Taxpayers An Average of $5,448 This Year. Rural Jobs Averaged $9,765.
Photo: Tennessee State Capitol Building
The Center Square [By Vivian Jones]-
Attracting new jobs to Tennessee in 2020 has cost taxpayers 25% more in FastTrack economic incentive grants than last year, according to data from the Tennessee Department of Economic and Community Development (TNECD).
The TNECD has spent an average of $5,448 this year for each new job commitment incentivized by a FastTrack grant. Rural job recruitment proved particularly costly. On average, the state provided $9,765 in FastTrack grants per rural job – more than three times last year’s average.
The department has finalized more than $20 million in FastTrack grants this year, with just under $55 million in additional grants still pending. Of FastTrack grants that have been finalized, per job grant amounts range from $250 to $16,000.
Shoe retailer Genesco Inc.’s expansion in Davidson County in February cost the state $16,000 per job – the costliest per job recruitment in 2020. The state provided $10,000 per new job to McKee Foods Corporation for its expansion in Hamilton County and more than $11,100 per new job to AutoZone Texas LLC for its Henderson County expansion.
The largest overall FastTrack grant – $35 million – went to General Motors for a $1.7 billion expansion at its Spring Hill plant. Unlike every other FastTrack grant approved this year, the General Motors expansion will not create any new jobs in the Spring Hill location. The grant will be used to help retrain 2,000 existing plant employees during the transition to electric-vehicle production.
The TNECD said several factors are considered when the department formulates an incentives package, including the amount a company will invest, how many and what quality jobs will be created, location and industry trends.
“Over the past several years, our focus has shifted slightly from recruiting projects with a high headcount to projects that will provide higher quality, higher wage jobs,” TNECD spokesperson Jennifer McEachern told The Center Square in an email.
Sometimes, McEachern said, increasing the per job incentive amount is necessary to attract higher quality jobs.
The program has critics who believe the state shouldn’t hand out money to companies relocating or expanding in Tennessee.
In the Beacon Center of Tennessee’s 2020 Pork Report of government waste, fraud and abuse, a FastTrack grant for radio host and author Dave Ramsey’s headquarters expansion and the FastTrack program itself took two of the three slots for government waste this year.
“Beacon has always advocated for eliminating corporate welfare programs and lowering taxes for all businesses instead,” Beacon Center Executive Vice President Stephanie Whitt told The Center Square in an email. “These latest numbers just further prove these programs are ineffective and an increasingly bad return on investment.”