HomeBudget & Tax NewsTennessee Funding Board Won't Say What Projects Will Cost Taxpayers

Tennessee Funding Board Won’t Say What Projects Will Cost Taxpayers

(The Center Square) — This week, Tennessee’s Funding Board is scheduled to approve incentives of more than $1 million to six different companies.

But the grant amounts, paid with public funds through the Department of Economic and Community Development’s FastTrack grant program, have not been announced publicly.

The TNECD announces new projects that will receive grants but will not publicly divulge the amount of incentives each project will receive when the project is announced.

Lindsey Tipton, Public Information Officer for the TNECD, explained that is because they are not legally required to divulge those million-dollar incentives when projects are announced.

When asked by The Center Square why the department announces projects that are pending but will not then tell the public how much those grants are, she said “Projects are announced when a company has made a commitment to make a capital investment and create new jobs in Tennessee, Announcements are typically made prior to a public meeting (such as State Funding Board or a local government meeting) when the existence of the project would be revealed at that meeting. Due to state contracting laws, the contracts are not finalized at the time of an announcement. State public records laws provide that the contracts themselves and the information contained in those contracts are not considered public records until the contracts are finalized.”

The projects and incentives are part of the same contract and would be finalized, and required to be announced, at the same time.

On Thursday, for example, the department announced a project in Etowah involving a new manufacturing facility for Piedmont Lithium. When asked about the grant involved with the project, however, Tipton would not divulge that amount even though a Funding Board agenda said that the project is set to receive $1.5 million from the state.

“Any grant assistance provided by TNECD will be posted to our department’s transparency website within 30 days of the announcement,” Tipton said.

Economists have studied and shown that economic incentive grants do not help state taxpayers but they do help politicians to receive more in political donations and help incumbents win elections by a larger margin.

A recent study also shows that, once one company receives a large incentive, others in the same business genre will expect the same into the future.

“What I would suggest to people is, in the absence of evidence that these programs work, they should assume they do not work,” said Gary Wagner, a professor of economics at the University of Louisiana-Lafayette. “Flip the default.”

This month alone, Bridgestone Americas received an $8 million incentive for its expansion in Morrison and Hankook Tire received $6 million for its expansion in Clarksville. Both companies already have a presence in the state and are simply expanding existing facilities.

Originally published by The Center Square. Republished with permission.

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Jon Styf
Jon Styf
Jon Styf is an award-winning editor and reporter who has worked in Illinois, Texas, Wisconsin, Florida and Michigan in local newsrooms over the past 20 years, working for Shaw Media, Hearst and several other companies.

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