Haslam: Figuring Out Incentives is Complicated

By Eric Schelzig, Associated Press
HENDERSONVILLE, Tenn. — Tennessee is still trying to come up with a standard approach toward offering incentives for business prospects, Gov. Bill Haslam said Thursday, adding that the task involves complex considerations about how each development deal is structured.
The governor put state development officials to work on a standard approach last March after lawmakers and others began questioning deals struck by Haslam’s predecessor with online retailer Amazon.com and appliance maker Electrolux.
“We’re not going to get out of the incentive business, because it’s too competitive of a world,” Haslam said. “Our job is to make certain that the deal that we do with those companies makes sense short- and long-term.”
Electrolux was promised more than $90 million from the state to help bring a plant to Memphis. And the state agreed to waive a requirement for Amazon to collect sales taxes on items sold through distribution centers being built in Tennessee.

Electrolux executive John Terzo praised the deal at an economic development meeting with the governor in Hendersonville on Thursday.
“We were looking in China and Mexico specifically, and the state of Tennessee stepped up in a way to help us with the capital investment,” he said. “To me that is probably the best use of the state’s resources, to create these seeds of opportunity for growth.”
Terzo said the Memphis facility is expected to employ about 1,250 workers, plus more with suppliers and in support jobs.
Haslam told reporters after the event that he won’t second-guess the incentive deals struck by former Democratic Gov. Phil Bredesen, who left office in January.
“I don’t know if it’s fair for me to go back and analyze every deal,” he said. “Somebody someday will be doing that for the deals we do.”
Haslam said a framework for incentives is still a work in progress because each potential deal has several variables, such as where the project would be located and how many jobs might be created.
The governor said there are deals he might approve in “a rural county with 18 percent unemployment that you might not do in county with 5 percent unemployment.”
“If it was just: ‘Invest X with this many jobs and we give you Y,’ it would be simple,” he said.
Economic and Community Development Commissioner Bill Hagerty said his agency is close to finishing the framework.
“It’s not only looking at the jobs return and the capital investment, but also taking into account the severity of the unemployment in a region and also the downstream economic impact of a particular investment,” he said.

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