Members of the Tennessee House reportedly voted this week to give FedEx $21.3 million in corporate welfare over the next seven years for a new hub expansion in Memphis, according to various news outlets.
Specifically, this type of corporate welfare is in the form of tax breaks. House members voted to make this happen on a 96-2 vote. State senators still must approve a bill of their own, according to the Memphis-based TV station WREG.
“The bill initially dealt with lease or rental price reporting to the commissioner of revenue. But the legislation by Republican House Speaker Glen Casada was overhauled to include $16.1 million in state and $5.2 million in local sales and use tax exemption directed at building materials for the FedEx project,” WREG reported.
“Republican Rep. Mark White of Memphis says the project is expected to be completed by the end of 2026.”
According to The Memphis Commercial Appeal, if the legislation is enacted into law then Tennessee would lose $16 million in tax revenue. The local government would lose $5.1 million.
“FedEx paid more than $110 million in state taxes in 2018 and will still pay $30 in sales tax for its hub modernization improvements,” The Commercial Appeal reported.
The people at FedEx told The Tennessee Star earlier this year that, yes, they unabashedly seek corporate welfare.
“FedEx considers all available state and local financial incentives when evaluating potential facility projects,” said spokesman Jonathan Lyons, in an emailed statement.
“As a matter of policy, we do not publicly discuss specifics of a project until all the details have been finalized.”
As The Tennessee Watchdog reported in 2016, FedEx officials have successfully lobbied Tennessee officials for a break on aviation fuel tax. That money goes into the state’s Transportation Equity Fund.
The revenue from that tax goes to the state’s 79 airports, many of which are small, in rural areas and cater to businessmen and women who fly in on private jets.
Some of the people who run those airports rely on that money for their maintenance and lighting needs, among other things, they said. State officials, these airport officials went on, pushed this tax break through with such zeal that they never bothered to consult with small airport officials first.
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Chris Butler is an investigative journalist at The Tennessee Star. Follow Chris on Facebook. Email tips to [email protected].
I would certainly like a complete accounting of the net dollar benefit of all of this corporate wooing. I dare say that we, the tax payers of Tennessee, are on the losing end of the deals while the politicians benefit. Just my opinion since no real facts are available.
That’s OK. We will make it up in the big Haslam Gas Tax as long as FedEx big birds gas up in Memphis. Or do they fly some where else to gas up?