Story Published:
May 26, 2010 at 6:10 PM CST
Story Updated:
May 26, 2010 at 6:10 PM CST
Tennessee will further ingrain itself in distributing tax money to venture capitalist businesses that will choose to reinvest in businesses to either start or move to Tennessee.
There's already six firms that were awarded tax credits last year by the Legislature through venture capitalists. Now the Legislature wants to appropriate an additional $80m in tax credits to be awarded by venture capitalists equally to four additional firms by Commissioner of Economic Development Matt Kisber and Commissioner of Revenue Reagan Farr.
That means $20m in tax credits to four more venture capitalists.
You might ask at this point: What is a venture capitalist?
It's a business that provides startup or seed money to another business so as to get the business up and running. They see the potential for a return on their investment. Why is the State providing more milions in tax credits--money from State coffers to venture capitalists who will reinvest in companies that will startup or move to Tennessee?
Now the kicker: The State-run Venture Capitalist Program that willl distribute the tax credit money to private venture capitalists is run by Kisber and Farr. They have autonomy to control the purse strings, and an amendment to bar government officials from working for TNInvestco for a year after they leave office was defeated in the Commerce Committee.
Translate that to mean that Kisber and Farr will be able to start working for TNInvestco next January when the Bredesen Administration leaves office. Other amendments that were defeated would have required an audit of TNInvestco by the State Comptroller and would have required some of the money to be awarded to minority and women-owned firms.
$80 million in tax credits translate to ordinary working people to mean money in a year when Tennessee is facing a budget shortfall is no mere drop in the bucket when the total budget tops out at around $28b.
That's 28,000 million dollars to math-challenged folks like me.
So ten venture capitalist firms willl get $20m each to invest in firms that will start or move to our fair state. Let's figure: That means TNInvestco will have $200m to work with, provided Governor Bredesen signs the bill. But the full House and Senate must vote on it first. TNInvestoco makes no provisions for identifying where the money is going or who benefits.
The scoring matrix that decides which companies get the money is also confidential. This is how Tennessee spends hundreds of millions in tax money to lure companies and their jobs to the State.
It looks like a railroad job to me. Also looks like Kisber and Farr have punched their tickets to ride.
If it's so good for Tennessee taxpayers, why is there so much secrecy? Want to read moore? Click here.
