(The Center Square) – Tennessee ranked 38th in the country among the 51 states and District of Columbia for economic development incentive transparency in a new report from nonprofit Good Jobs First in its sixth report card on transparency.
Tennessee was ranked highly, second in the country, for the transparency of its economic development FastTrack incentive program but received zero points each for its transparency on data center subsidies, film and television tax subsidies, industrial machinery subsidies and jobs tax credits.
“Tennessee has fair recipient level disclosure of its FastTrack grants, which includes job outcomes and some level of pre-approval transparency (the state could improve on the usability of the data),” the report said. “Nevertheless, its tax-based subsidies have no recipient level transparency.”
Tennessee had a ranking of 9.6 while the national average was 22.0 points. The study looked at the top four or five major economic development incentive programs in each state.
Tennessee dropped 6.0 points since a similar Good Jobs First study in 2014.
Nevada, Connecticut and Illinois ranked atop the transparency rankings while Georgia and Alabama were at the bottom, scoring 0.0.
Tennessee’s FastTrack program, which awarded $78 million in incentives in 2020, was praised for its transparency, with the report saying “Texas’s Chapter 313 and Tennessee’s FastTrack are two other exemplary programs in (abatements and exemptions), sharing second place with 9 points.”
FastTrack grants are state grants sent to local governments for specific infrastructure improvements or to companies to help offset the costs of expanding or moving into the state with the goal of increasing the number of full-time jobs and the average wages of jobs available in an area.
“Transparency does not necessarily mean a program is effective or accountable,” said Kasia Tarczynska, senior research analyst and lead author of the study. “But if you cannot even see who got the money and what they said they would do with it, you can’t answer the most basic questions about return on investment or equity.”
The Tennessee State Funding Board approves any FastTrack grants of $750,000 or more.
The report stated that Tennessee did not, however, have transparency websites for its $72 million in film/television production incentives, $65 million in jobs tax credits or $46 million in industrial machinery credits from 2020.
The film/TV incentives are a 25% to 30% rebate of a production’s expenses in a state, the jobs tax credits are franchise and excise tax credits for job creation and investment while the industrial machinery credit is up to a 10% tax credit on machinery purchases in selected industries.