The total incentive package for the VW deal hasn’t even been calculated according to the Tennessee governor. However, they estimate it to be around $400 million in this article. But I think that number needs to be set in context.
*$81 million in free land from the County. That’s not cash out of pocket. That is land that previously wasn’t generating any tax for the county and now it will be.
*A state-offered job tax credit of $5,000 per job over 20 years is available on corporate taxes for companies investing at least $1 billion. It is valued at $100,000 a job over 20 years or $200 million for 2,000 employees. Again, no cash out of pocket. If TN didn’t attract the plant, they wouldn’t have received this tax anyway. Now they forgo the corporate taxes but get 10s of millions in personal taxes paid over the 20 years. Not a bad deal.
Again, not one dime of taxpayer dollar spent yet.
*Estimated job training provisions typically run between $60 million and $80 million. This is cash out of pocket. However, states spend billions each year on education and training so why not $60 million to train 2,000 workers on state-of-the-art manufacturing jobs that will last for decades?
I guess my point here is that the State didn’t just cut a cheque for $400 million and give it to the company. They are forgoing tax revenue they wouldn’t have anyway without the deal and they are giving away land that they weren’t generating taxes on anyway and they are paying to train workers.
Not a bad investment in my opinion.