Originally posted by: bctbct
State lacks money to lure industrial development
Published:
June 27, 2002
NASHVILLE, Tenn. (AP) -- Dwindling state money for economic development incentives is keeping Tennessee from luring major industrial projects, according to those trying to do the recruiting.
"We don't even have the cost of admission to the game," said Janet Miller, economic development director for the Nashville Area Chamber of Commerce.
The budget for Tennessee's chief economic development incentive program has been sliced by more than half -- from $16.5 million to $6.5 million, a move officials say prompted companies to bypass the Volunteer state and strike deals with Tennessee's neighbors instead.
In addition, a no-new-taxes budget being considered by the state legislature would cut funding by 42 percent for the Department of Economic and Community Development, which is responsible for luring business to Tennessee.
"We just can't get that aggressive at the state level. Kentucky, Alabama and Mississippi are all able to shoot us out of the water," said Randy Brewer, president of the Lawrenceburg/Lawrence County Chamber of Commerce.
In the past 18 months three large automotive companies that considered building or expanding a plant in Tennessee were drawn to other states offering pricey incentives.
Mississippi gave Nissan North America $295 million in incentives and more than $400 million in additional tax credits two years ago to build its $930 million truck plant in Canton, Miss. It added another $68 million incentive package last week and landed a $500 million expansion project that will increase total employment at the plant to 5,300.
Hyundai Motor Co. received $234 million in incentives from Alabama in April to build a $1 billion plant that will employ 2,000 people near Montgomery, Ala. It beat Kentucky, which offered $123 million in incentives.
Alabama also offered Toyota Motor Co. $29 million in economic incentives in 2001 to build its $220 million engine plant in Huntsville, Ala., instead of Clarksville, Tenn. The facility will employ about 350 people.
"It's frustrating," said George Halford, president and chief executive officer of the Clarksville/Montgomery County Economic Development Council.Halford said Tennessee was unable to match Alabama's plan, despite Clarksville's attractive local package for tax exemptions.
In the past, Tennessee has given tax credits for large projects. But most of its economic incentives come through job training and infrastructure, such as roads and water and sewer lines.
"We lose because other states are willing to go to the well," said ECD Commissioner Tony Grande.
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On the Net:
Tennessee Department of Economic and Community Development:
http://www.state.tn.us/ecd/
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