Tag Archives: subsidy

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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Taxpayer Subsidy to Chamber of Commerce Draws Criticism

A group of people opposing a Metro property tax increase said the Nashville Area Chamber of Commerce should refuse to accept a $300,000 Metro subsidy after endorsing the tax plan, reports The Tennessean.
Talk radio host Ralph Bristol, Nashville Tea Party founder Ben Cunningham, businessman Lee Beaman and Justin Owen of the Beacon Center of Tennessee, a conservative think tank, said the chamber should live without the city subsidy “to avoid a perceived conflict of interest.”
“In its statement, the Chamber pointed to the need to raise government employee salaries and fund our schools as justification for the tax increase,” the group said in a news release. “Refusing its $300,000 subsidy will help ensure that every dollar of the proposed tax hike goes to fund those programs the Chamber claims warrant the tax hike in the first place, rather than to boost its own bottom line.”
Bert Mathews, chairman of the chamber’s board of directors, dismissed the opponents’ comments in a phone interview.
“The money the chamber receives is for a contract for services rendered,” he said. “We’re providing economic development support to the city. It’s just like any vendor fixing your air conditioner or changing light bulbs. That’s our sense of it.”

Fed Subsidy of Charter Schools Disappears

Until now, new charter schools in Tennessee got between $600,000 and $700,000 in federal grants to cover startup costs in their first three years, including big-ticket items such as building leases. But the money has dried up, reports the Commercial Appeal.
“It’s a significant strain to say the least,” said Freedom Prep principal Roblin Webb. “That’s the money you use to find and lease facilities, pay your teachers. “We could not have started without the money. This is huge.”
Former Memphis mayor Willie Herenton expects he will have to delay opening of several of the seven charter schools he hoped to open in the fall of 2012 in Orleans Elementary, Manassas High and Booker T. Washington High in Memphis.
“In all candor, I was shocked to hear the new startups would not have necessary ingredients to launch new programs,” he said. He plans to seek funding from philanthropic and corporate sources.
For years, Tennessee charter operators got $225,000 to use the year before the school opened, followed by another $250,000 to cover operational costs before state per-pupil tax money began flowing to the schools, said Rich Haglund, director of charter schools at the state Department of Education.
“If a school opened with 100 students, they would get one-tenth of their (Basic Education Program tax funds) that August. That is not going to pay their operational costs,” he said.

Democrats Say Fincher Collects Another $88,000 in Federal Subsidies

Tennessee Democratic Party news release:
NASHVILLE, Tenn. — Records show Rep. Stephen Fincher raked in another $88,000 in crop payments from the federal government in 2010 — at the same time he was campaigning against government spending.
During his career as a subsidy farmer, Fincher has siphoned off $3,342,062 in tax dollars from the farm subsidy payouts, according to the Environmental Working Group, a non-profit consumer advocacy group.
“Mr. Fincher is just another hypocrite who’s willing to slash spending for Medicare, women and children, but is happy to keep raking in tax dollars for himself,” said Chip Forrester, Chairman of the Tennessee Democratic Party. “Mr. Fincher has shown us over and over again that his lips don’t tell the same story as his actions.

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