Report: Corporate Welfare in Tennessee Needs More Transparency

Tennessee officials hand out a good bit of corporate welfare, but they could do better to make sure the public knows how that money gets spent, according to a new state Comptrollers report.

The report suggests several ways members of the Tennessee General Assembly can make matters better.

As the report notes, Tennessee offers several kinds of corporate welfare. The degree of transparency for each differs to a certain extent. Some business incentives require public hearings. Some require business officials hand over annual reports on the status of an incentive program, Comptrollers said.

“For other incentives, state law does not require periodic reports on the status of programs, and data and information are not posted online,” Comptrollers wrote in a press release.

“The Comptroller’s Office of Research and Education Accountability found one type of business incentive with a required evaluation on a periodic basis: business tax credits,” Comptrollers wrote.

But that was an exception. State officials do not require evaluations for most business incentive programs, Comptrollers added.

Tennessee officials entice businesses and industries to set up shop or stay or expand in Tennessee. To do that they offer Payment in Lieu of Tax agreements, tax credits, and tax exemptions, and grants, among many others.

For some incentives, state law does not require periodic reports on the status of programs, and data and information are not posted online.

“Details about some incentives are kept confidential because a business’s tax returns or proprietary information are involved,” the report said.

“Information may also be kept confidential if the release of such information would harm the state’s business recruitment efforts, placing the state at a competitive disadvantage relative to other states in enticing a business to move to Tennessee.”

The report addresses, for instance, what legislators can do about Tax Increment Financing. As reported, TIF benefits are normally meant to incentivize developers to build new projects in blighted areas of town and, if possible, spruce them up.

Comptrollers said TIF economic impact plans are not posted online, but they are subject to an open public records request.

“Some information related to trade secrets, marketing information, and capital plans may be redacted,” Comptrollers wrote.

Members of the General Assembly should ask themselves whether they should require additional information about TIF get made public, Comptrollers said.

In a column published last week, Mark Cunningham of the Nashville-based Beacon Center of Tennessee, a free market think tank, said transparency in these incentive deals is a must.

“Politicians and bureaucrats— without having to provide reasoning to taxpayers about why they picked certain business over others—get to choose which businesses will receive tax dollars,” Cunningham wrote.

“In reality, this practice leads to the government picking winners and losers, while taxpayers are left holding the bag.”

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Chris Butler is an investigative journalist at The Tennessee Star. Follow Chris on Facebook. Email tips to [email protected]








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2 Thoughts to “Report: Corporate Welfare in Tennessee Needs More Transparency”

  1. Betty Lynn Duley

    William, I agree with you on general. However, in today political atmosphere in Nashville, corporate welfare dollars and TIF money is going to developers who may be friends or perhaps donors of the ruling democrats. Many of them don’t live anywhere near Nashville and those dollars will never be seen in our economy. These developers should be pleased to be able to participate in this book and should pay their own way gratefully! Instead Briley and many council members are selling Nashville and our heritage just as fast as they can. Someone should be following money.

  2. william r. delzell

    Tennessee as far as I can remember has always had a notorious record of unaccountable corporate welfare that transcends both major parties in the state. Most of this welfare favors wealthy white right wingers over middle-to-low income white or nonwhite people in the state. It is welcome to see criticism of this corporate welfare to finally come from the right as well as from the left.

    On another note, I noticed that the results of last August’s primary showed that even though both Blackburn and Bredesen won their respective primaries by wide margins that almost twice as many showed up to vote in the Republican primary over that of the Democratic primary. If that ratio holds true in November, it would favor Blackburn over Bredesen susbstancially. If I were Bredesen, I would learn a lesson from Blackburn: not to take my own party’s base for granted. Blackburn works her party base while Bredesen ignores his thinking that he will get enough moderate Republicans to come over to his side that he can safely ignore blacks, and progressives. Bredesen will need to not only cut into the Republican part of the electorate but he will also need to keep the state Democrat party base enthusiastic enough to remain tightly loyal to him. He is making a mistake if he takes the party’s liberal base for granted. He should learn from Harold Ford, Jr.’s and Randy Tyree’s failures.