Gov. Bill Haslam’s administration has touted its ability to give taxpayers more bang for their buck when it comes to economic development by leveraging increasingly smaller grants for projects that promise more jobs than deals under previous governors.
But, reports The Tennessean, the administration deviated from that pattern when it doled out $30 million to Eastman Chemical Co. in May.
Eastman has promised to pump $1.6 billion of its own money into renovating and expanding its facility in Kingsport, where the publicly traded company has operated since 1920. The chemical manufacturing company is the largest employer in northeast Tennessee and one of the largest in the entire state.
But Project Inspire, as it has been dubbed by company executives and public officials, comes with relatively few predicted new jobs considering the state’s investment. Eastman has promised 300 new jobs, which comes out to $100,000 in taxpayer incentives per anticipated job.
During his first two years in office, the Haslam administration has spent an average of $3,104 in incentives per new job, a statistic the Department of Economic and Community Development has highlighted in its annual reports as evidence the program is being run more efficiently than in the past.
ECD spokesman Clint Brewer acknowledged that Commissioner Bill Hagerty used the incentives-per-job metric to track how efficiently the department is operating. But Brewer said the Eastman package compared favorably to other incentive deals when considering the state’s relatively small contribution to the overall project. The $30 million in taxpayer funds amounts to just 1.9 percent of the overall $1.6 billion project, and by that measure Brewer said taxpayers are still getting high value for their investment in Project Inspire.
Eastman Chemical employs 6,750 workers in Tennessee, plus 2,500 contract workers and has 6,200 retirees drawing pension and retirement benefits. The company, which has deep political connections, has flexed its muscle by spending significantly on state legislative campaigns in recent election cycles. It also employs Tom Ingram’s firm, The First Group, to represent its interests in Washington, D.C.
Ingram helped Haslam with his 2010 election campaign and has been personally paid by Haslam to advise him while he was governor. Last week, Haslam said he is putting Ingram back on his campaign payroll after complaints that Ingram lobbied other state officials at the same time he worked as his personal adviser.
…As is often the case in economic development packages, there were whispers of Eastman looking to move some of its operation outside Tennessee. State Rep. Tony Shipley, R-Kingsport, said he heard other states were trying to woo Eastman. Shipley said even losing a fraction of the workforce, or missing out on the 300 new jobs, would have seriously hurt the community.
When the incentive deal was announced last month, Haslam told local media that he didn’t want to be the governor when Eastman decided to expand somewhere else.
Asked whether moving facets of its operation out of Kingsport was an option, Eastman spokeswoman Kristin Sturgill said “it always makes sense to consider options before making a large investment.”
State incentives to Eastman equal $100K per job
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