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TN Ranks High in ‘Megadeal’ Corporate Subsidies

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.

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