News release from Tennesseans for Fair Taxation:
Washington, DC, June 19, 2013 — In recent years, state and local governments have been awarding giant economic development subsidy packages to corporations more frequently than ever before. The packages frequently reach nine and even ten figures, and the cost per job averages $456,000 and often exceeds $1 million. Tennessee is tied for fifth-most megadeals–with 11–and ranks eighth in total megadeal spending at $2.5 billion.
These are the findings of Megadeals, a report released today by Good Jobs First, a non-profit resource center based in Washington, DC. The report can be found online at www.goodjobsfirst.org/megadeals.
“These subsidy awards are getting out of control,” said Philip Mattera, research director of Good Jobs First and principal author of the report. “Huge packages that used to be reserved for ‘trophy’ projects creating large numbers of jobs are now being given away more routinely.”
Naomi Goodin of Tennesseans for Fair Taxation (TFT) noted, “Tennessee is fifth in the number of megadeals, yet tied for last in measures of personal income growth. This sounds like a ‘reverse Robin Hood’ mentality. We already penalize our middle and lower-income citizens with proportionally higher taxes. Let’s at least make sure their tax dollars will benefit the people.”
More from the Chattanooga TFP: The deal to lure Volkswagen to Chattanooga was the largest in Tennessee at $554 million in state and local subsidies, the report said.
Also, three Tennessee economic development projects involving Japanese automaker Nissan, including the relocation of its North American headquarters, were cited in the report, with total subsidies reaching $528 million, according to the study.
Kasia Tarczynska, a co-author of the report, said Tennessee offers expansive subsidy programs to companies. She cited the state’s tax credit programs related to jobs and training.
“Tennessee is very aggressive in this arena,” she said.
Tarczynska termed the headquarters relocation subsidies by the state “one of the more controversial,” saying it offers up to $50,000 per job for simply moving positions from one state to another, for example.
When a smiling Gov. Bill Haslam signed into law a new statute governing the operation of staff leasing companies, he was surrounded by a group that included two people whose company recently was cited and fined for operating without a license, reports The Tennessean. One of them had been described in a state document as “not of good moral character” — which may be why no one seems to want to own up to inviting them.
In a consent order signed April 9, the attorney representing Chris and Andrea Ball of Powell, Tenn., acknowledged that their firm, HR Comp LLC, had acted as an employee leasing agency without the license required by state law and that the Balls had given false responses when asked about it.
An investigation by the state Department of Commerce and Insurance found that HR Comp LLC had a staff leasing arrangement with Barden Enterprises, parent company of a Knoxville sports bar, for about 10 months ending in November 2010.
“Southside Sports Bar had three to five employees during that period,” said D. Christopher Garrett, a spokesman for the agency.
So the department imposed a $10,000 fine and issued another Ball company — but one with a strikingly similar name, HR Comp Employee Leasing — a probationary one-year license.
…”The department determined that Andrea Ball was not of good moral character because the Jan. 12, 2010, response she sent about HR Comp’s unlicensed activity was not true,” the consent order states.
The probationary license was issued after Andrea Ball admitted submitting the false statement and paid the $10,000 civil penalty.
According to Haslam’s aides, the bill on the licensing of staff leasing agencies was one of 25 signed in a series on May 29.
As for who invited the Balls, Haslam aides and state legislators on hand for the ceremony said they had no idea.
— Note: The state legislators in the picture are Rep. Ryan Haynes, R-Knoxville, and Sen. Jack Johnson, R-Franklin. Johnson told the Tennessean he came to the ceremonial signing event for another bill, but then joined the staffing bill group for the picture.
By Erik Schelzig, Associated Press
NASHVILLE, Tenn. — If Democrats have their way, the Tennessee General Assembly would meet only every second year, lawmakers’ daily expenses would be capped and bill sponsors would have to divulge if their legislation originated with national groups.
Democratic leaders insist their proposals are designed to promote good government. But Republicans charge the measures are election-year games.
“I’d be glad to look at any suggestions they have, but they’re playing politics,” House Majority Leader Gerald McCormick, R-Chattanooga, said in a recent interview. “When they had the power to do it, they didn’t do anything about that.”
But House Democratic Caucus Chairman Mike Turner of Nashville argued that most of the lawmakers sponsoring the current measures didn’t hold leadership positions before Republicans won their majority in the House in 2008.
“How long do you hold a good idea down just because a party took things a particular way several years ago?” Turner said.
Tennessee is slightly below average in how well it monitors, verifies and enforces the terms of its job-creation subsidies, an economic-incentive watchdog group said in a study released Wednesday.
From the Tennessean’s report : The Volunteer State received a C-minus grade and a 29th-place ranking from Good Jobs First, whose Money-Back Guarantees for Taxpayers report found fault with all five of the state’s major incentive programs.
Tennessee doesn’t require those receiving job tax credits to report their outcomes, the study said. Nor does the state independently verify claims made by those receiving FastTrack job-training assistance, the headquarters tax credit or even sales-tax credits for a qualifying facility in an emerging industry.
The law that created the Tennessee Job Skills program, which awards job-training grants, does not contain any penalties for those who don’t meet requirements, the study said. The group said the program’s administrator was “unwilling” to answer its questions about the program.
KNOXVILLE, Tenn. (AP) — Tennessee stands to see very little fallout from the failure of a congressional panel to reach a deal on reducing the federal deficit, the state finance commissioner said Tuesday.
Mark Emkes projected that the state expects to lose as little as $2 million in federal money during the upcoming budget year, concentrated in areas such as grants for education, affordable housing and child development programs.
“We were prepared for much worse,” Emkes told The Associated Press before budget hearings at the University of Tennessee. “It is a very big relief.”
The congressional supercommittee’s failure this week to reach a compromise on deficit reductions means $1 trillion in federal cuts are automatically slated to be split between domestic programs and defense, beginning in January 2013.
President Barack Obama has vowed to veto any effort to undo the automatic cuts to spare military spending.
And so the counselors of Good King Billy, at the outset of his reign, were summoned to the presence of the monarch, who proceeded to speak unto them thusly:
“A wondrous vision has come unto me of change that shall come to pass under my rule in this land of the Tense Sea, wherein children now foolish shall become filled with knowledge in their Temples of Learning, wherein the common people now wretched shall be gainfully employed and wherein the noble barons of business and even ordinary merchants shall be freed of onerous edicts issued by kings of old, to whom I mean no disrespect, so that they may assist children in their learning to perform beneficial tasks of the future and their parents to prosper such tasks now.
“This vision shall be called the New Normal. I hereby decree that it shall be done. And without any expenditures from the royal treasury, save that necessary as incentives to the barons of business and such as may be necessary to maintain health and happiness of the people.
“Toward that end, I declare that ye shall conduct a top-to-bottom review of the Old Normal to ascertain the revisions that need be made for the New Normal, so that I may issue the appropriate edicts. For I humbly confess, forsooth, that I am sore perplexed by many things of which I hear from those subjects who beseech me for the granting of favors.
“I further command that a great sword be forged, as also pledged in my campaign of the red umbrella and chocolate pie, that shall be called Dashboard and be made mystical by the kingdom’s best magicians so that it may guide me in the accomplishment of royal deeds.”
The Senate has given final approval to a bill that declares courts can ignore minor mistakes in search warrants and use the resulting evidence against criminal defendants in trials.
The Senate approved the bill, HB401, with a 26-4 vote on Thursday and sent it to Gov. Bill Haslam for his signature. The House approved it earlier on an 89-8 vote.
Sen. Randy McNally, R-Oak Ridge, has been pushing similar legislation for years, having twice on approval of the Senate – most recently in 2009 — only to see the bill fail in the House. He acknowledged the earlier versions were “much more expansive” than the final version as passed under his sponsorship Thursday.
Proponents say the bill provides a “good faith exception” to court rules requiring judges to throw out evidence collected in a legally-flawed search or seizure. The Tennessee District Attorney General Conference drafted the proposal.