According to a USA TODAY NETWORK – Tennessee investigation, the state of Tennessee spends more that $2.5 billion per year on grants, tax breaks and tax credits to recruit and keep businesses in Tennessee.
The investigation also found that the agencies and officials who distribute and manage these funds do not track or disclose the benefits of the deals. Despite the promises made in recruiting investments, there is no way to measure success or track whether or not businesses are holding up their end of the deal.
According to the investigation:
- “It is impossible to gauge whether some of the deals were a good value because local agencies awarded businesses multimillion-dollar property tax breaks without calculating the actual loss of tax income to government coffers.
- “There is no accountability for some companies that received incentives but don’t report their hiring progress to local economic development boards or the state Department of Economic and Community Development.
- “A group of companies getting subsidies from Tennessee’s main grant program, FastTrack, fulfilled about 80 percent of all jobs committed. Some exceeded their hiring expectations, but nearly 40 percent said in 2016 they had fewer than half of the jobs promised.”
Sources say this lapse of oversight has peaked the interest of Attorney General Herbert Slatery. This interest could manifest itself as an opinion should it be requested or as an investigation into the Department of Economic and Community Development (ECD) who is responsible for this lack of accountability.
Either option is certain to have a negative outcome on Governor Bill Haslam, former ECD Commissioner and now gubernatorial candidate Randy Boyd and current commissioner Bob Rolfe.
In recent years, the company Hemlock Semiconductor built a $1.2 billion plant in Clarksville. The company estimated the plant would bring 500 jobs and received more that $400 million in subsides. The plant never opened, and according to the Tennessean, the state lost more than $100 million.
If the launch of Hemlock would not have been so publicized, would we even know about it’s expensive failure?
If Haslam and Boyd had their way, the answer is no.
An investigation would likely throw a wrench in the works of Haslam’s bid for senate and Boyd’s for governor, as both are campaigns are touting their “business-friendly” leadership.
Haslam appointed Boyd as commissioner of the ECD in 2015 where he served for two years. Boyd has taken his time as commissioner and ran with it, boasting the creation of over 50,000 new private sector jobs. But without an investigation, how will Tennesseans know if their money was spent wisely?
An AG investigation could determine if the ECD’s lack of transparency was caused by Boyd and other leaders turning a blind eye to their poor, nonexistence record-keeping or pure negligence.
As an overly-flattering article from the Knoxville Mercury, “Boyd is a cheapskate. Except when he is giving away millions of dollars.” While the article was trying to pat him on the back for bragging about his philanthropic deeds, the billions of taxpayer dollars Boyd gave away every year gives the quote new meaning.
If the AG goes after this conveniently immeasurable “success” of government subsides, Boyd and Haslam could be forced to answer for their closed-door government and willingness to throw billions of taxpayer dollars at businesses every year for what could be nothing more that a cheap campaign talking point.