Buying Friends For Tennessee

November 25, 2005

 

The recent announcement of Nissan moving their North American headquarters to Tennessee is a good thing. Nissan cited the lack of a state income tax as one of the primary deciding factors. Ironically, the three men who put together the deal – Governor Phil Bredesen, former governor Don Sundquist and Department of Economic and Community Development Commissioner Matt Kisber – have all, at one point or another, advocated a state income tax. I hope they've learned their lesson but I'm not holding my breath.

 

Once the dust settled and details of the plan began to emerge, it became clear that neither of the three could resist giving away the store to make the deal, something that was totally unnecessary. The deal had Bredesen's fingerprints all over it, reminiscent of the now-infamous Houston Oilers deal where taxpayers were convinced to build a place of business for a multi-million-dollar company while repeatedly raising taxes to pay for it. Instead of merely pointing out that executives who relocated would instantly get a ten percent pay hike due to our lack of an income tax, not to mention getting much more bang for their buck when it comes to housing, the dealmakers chose instead to fork out your tax dollars to seal the deal.

 

The incentives amount to roughly $155,000 per job. Again, it's a good thing they're coming and I will be welcoming them with open arms but it's a crying shame that our state leaders have such an inferiority complex that they have to pay people to come here.

 

State Representative Glen Casada, who represents Franklin, where the company headquarters will be relocated, was one of the few elected officials brave enough to call the deal what it was. “I am sick and tired of corporate welfare,” Casada said. “It is always at the expense of the taxpayer that suffers under a 'deal' that gets a new corporation.” Of course, he's exactly right.

 

Ironically, it wasn't two weeks after the big Nissan announcement that General Motors had an announcement of their own. They were eliminating some 1,500 jobs at their Saturn plant as part of a restructuring plan, putting 30,000 people nationwide out of work. The corporate gods giveth and the corporate gods taketh away. Now I'm hearing rumblings from some inside Nissan and the United Auto Workers union that they want the state of Tennessee to cough up some cash to help GM. Matt Kisber gleefully announced recently that he'd been getting calls from all sorts of companies who heard about the Nissan deal and want some of that action for themselves. I can't blame them but I can blame us if we continue down this road of buying corporate friends for the state.

 

We have nothing whatsoever to feel inferior about. We have a great quality of life in Tennessee. Our business climate is very good. (It would be even better if Kisber and his friends hadn't raised the sales tax a couple of years ago.) The terrain is gorgeous, the people are great and the opportunity to hire a solid work force is here. We don't need to give away the store to entice people to set up shop here.

 

What we need to do is learn a lesson from the Nissan move. If giving corporations tax breaks is what our leaders think it takes to get corporations to move here, let's lower taxes for everyone. I don't disagree with the notion that lower taxes attract industry. However, tax incentives shouldn't be reserved for specific companies. If tax breaks are good public policy, let's make them the law of the land.