News Sentinel to appeal TVA’s denial of info on subsidy

The News Sentinel soon will be appealing TVA’s denial of a Freedom of Information Act request seeking the specifics of a subsidy the agency is giving a South Korean auto parts manufacturer expanding its operations in Clinton.

“Release of these details would cause TVA competitive harm by allowing other utilities, who are competing for the same customers, insight into TVA’s programs and strategies for attracting businesses to the Tennessee Valley,” the federally owned corporation stated in its refusal letter. “Release of the information would also impair the effectiveness of TVA’s economic development program by stifling TVA’s ability to obtain such confidential information from future prospective companies.”

Gov. Bill Haslam shakes hands with Y.K. Woo, president of South Korean auto parts maker SL America after an announcement of expansion of its Anderson County plant. TVA contributed a hidden amount  of incentives to the deal.

Gov. Bill Haslam shakes hands with Y.K. Woo, president of South Korean auto parts maker SL Americam after an announcement of expansion of its Clinton plant. TVA contributed a hidden amount of incentives to the deal.

The response ignores the fact that TVA is a public agency and the resources it is providing — to a private company — are public resources.

Incentives for economic development are a matter of public concern. Economists don’t even agree that they work, as the Federal Reserve Bulletin discussed in an article entitled: “Economic Development Incentives: Research Approaches and Current Views.” One issue the article noted was how incentives can lead to bidding wars among communities:

“In 1980, Nissan received an estimated $33 million, or $8,000 per anticipated job, for locating a new facility in Tennessee. The amount of subsequent incentive packages handed out to Mazda, Saturn, DiamondStar, and Toyota, among others, rose over the next few years, and by 1987, Toyota was receiving an estimated $150 million, or $50,000 per anticipated job, for locating a new facility in Kentucky. And the incentive packages were growing again before long.”

All of the other government agencies contributing incentives to the Clinton expansion made public what their subsidies were. But the administrators of TVA have determined that their need for managerial flexibility outweighs the citizenry’s need to evaluate how public resources are being deployed.

It’s worth keeping in mind that TVA’s CEO, Bill Johnson, is the nation’s highest paid federal official, pocketing a compensation package worth $4.6 million in fiscal 2014 and landing a raise last month that will let him earn nearly $1 million more in 2015. The agency also announced last month that it would be awarding $131 million in year-end bonuses to employees, an average of nearly $11,400 each.

In justifying its largess, TVA noted that it helped lure some $8.5 billion of new investment to the Tennessee Valley in the past year, which is supposed to add 60,300 new jobs.

“Economic development is a core component of TVA’s mission to serve and improve the quality of life of the 9 million residents in the Valley,” Johnson said. “It is a credit to the dedicated work of our employees and the strong relationships we have built with our customers and communities that together we had a banner year in 2014.”

What public resources did TVA exchange for that economic investment? That’s a secret the agency says the people have no right to know.

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