Noted in the Governor’s 2018-2019 Budget is an $18 million dollar FastTrack grant for Tyson Foods that may be part of a deal to bring a chicken processing plant to Humboldt, Tennessee after plans for a similarly described project in Kansas met with “staggering” opposition from citizen activists. This year’s money for Tyson Foods is not currently listed in the FastTrack project database maintained on the Department of Economic & Community Development (ECD) website.
As part of Governor Haslam’s “Transparent Tennessee” initiative, ECD launched an interactive online platform called “Open ECD,” intended to provide a “comprehensive look at TNECD’s initiatives,” including, FastTrack, community and rural development grants. Haslam’s “Transparent Tennessee” was intended to help create a “customer-focused, efficient and effective state government.” This initiative was supposed to provide greater transparency and accountability in how the state government operates by enabling taxpayers to see how different departments are performing as well as how taxpayer funds are spent.
The only reference to date for the $18 million dollar FastTrack grant for Tyson Foods is on page xix of the Governor’s 2018-2019 Budget released with a cover letter dated January 29, 2018:
General fund supplemental appropriations in the current 2017-2018 fiscal year total $46 million, $38 million of which is in the Department of Economic and Community Development for a capital grant to DENSO ($20 million) and a FastTrack grant to Tyson Foods ($18 million).
Maryville based DENSO Manufacturing’s Tennessee plant is the largest of its four U.S. based plants.
The Tyson Foods website notes sales for Fiscal Year 2017 of $38.3 billion dollars.
In 2013 and 2014, ECD awarded small expansion grants to Tyson Foods for $200,000 and $124,000 dollars respectively although no detail is available in the database to explain how the funds were actually used.
No information is available through the Budget document, the “Open ECD” website or the Transparent Tennessee FastTrack Project Database to indicate whether the total $18 million dollar grant to Tyson Foods will all go to the new chicken-processing plant planned for Humboldt, or whether some of the funding will go to the expansion of the Tyson Foods plant in Union City that was announced in August, 2017. Nor is information available to explain what the money will pay for or how Tyson Foods qualified for a FastTrack grant according the ECD guidelines.
With regard to the $18 million FastTrack grant, The Star submitted the following questions to the ECD Communications office:
- For which Tyson Foods location is this allocation being made?
- What are the commitments from Tyson Foods for the number of jobs and average hourly wage?
- Have the funds already been committed to Tyson Foods, or does this grant need to be approved by the legislature as part of the FY2018-19 budget?
- When will (or did) the FastTrack grant funds be transmitted to Tyson Foods?
ECD spokesman Jennifer McEachern responded:
This project was announced in November 2017. https://www.tn.gov/ecd/news/2017/11/20/governor-haslam–commissioner-rolfe-announce-tyson-foods–inc–to-create-1-500-new-jobs-in-humboldt.html
We cannot release any further information about the project at this time under T.C.A. 4-3-730 as the grant contract for this project has not yet been executed.
The Tennessee Code section referred to in ECD’s response states:
(b) Any binding contract or agreement entered into or signed by the department that obligates public funds shall, together with all supporting records and documentation, be considered a public record and open for public inspection as of the date such contract or agreement is entered into or signed.
ECD was subsequently asked whether a plain reading of theTennessee law suggests that once there is a commitment to a deal, the underlying terms of the agreement would be available as an open record even if the agreement is not signed. Otherwise, the sole determiner in the law would have been that the agreement had to first be signed to become a record available under the state’s open records law.
McEachern promptly responded:
Under the statute, records are not open until the ‘binding contract or agreement that obligates public funds’ has been ‘entered into or signed.’ A handshake agreement is not a ‘binding contract or agreement’ (because handshake agreements are not binding on the State) nor are any public funds obligated by a handshake agreement. Those two requirements in the statute are not fulfilled legally until the incentive grant contract has been fully executed; therefore, the records are not open for inspection until the incentive grant contract has been fully executed. The inclusion of an item in ECD’s budget makes funding available but the State is not legally obligated to pay those funds to any entity until the incentive grant contract is executed.
In other words, transparency under both Tennessee law and Haslam’s “Transparent Tennessee” model means state taxpayers will find out how their money was spent only after the deal is sealed.
Rep. Curtis Halford and Sen. John Stevens who both represent Gibson County, were asked whether they would sponsor a bill for the $18 million dollar supplemental appropriation for the Tyson Foods FastTrack grant. They were also asked whether the total $18 million dollars would be directed solely to the Humboldt project and if not, how much would be directed to the Humboldt project and how much to any other Tyson Foods project in another location?
Neither legislator has responded.
If the supplemental appropriations for the Tyson Foods FastTrack grant included in the Governor’s 2018-2019 budget does not require a separate bill, all Tennessee legislators will still have to vote to approve the request when the budget is voted on in order for the $18 million dollar grant to Tyson Foods to take effect.