Rural areas deserve growth opportunities
Monday September 24, 2007
MATT KISBER
Matt Kisber is commissioner of the Tennessee Department of Economic & Community Development
From: the Tennessean
Opinions, page 8A
On Sept. 13, Gov. Phil Bredesen spoke to more than 750 people at the Nashville Convention Center and gave a very simple, but eloquent message: not everyone has shared in Tennessee's economic growth.
Since entering office, Bredesen has spoken repeatedly about the challenges of creating jobs in rural areas of Tennessee. Our state has created more than 108,000 new jobs and attracted $13.4 billion in new capital investment as well as 30 new corporate headquarters during the governor's first term. Tennessee has used reasonable and prudent investment incentives to grow the base of business taxpayers and that approach has paid dividends. Our state has experienced 17 straight quarters of growth in business tax collections with an average quarterly growth rate of more than 12 percent.
But our urban and suburban counties have largely benefited. According to the U.S. Department of Commerce, Williamson, Davidson, Shelby, Hamilton and Wilson counties have experienced the strongest growth in per capita income over the last four years, but in rural Tennessee counties like Hancock, Lake, Wayne, Johnson and Lauderdale, income growth has stagnated.
A fiscally sound approach
That's why I'm glad to see Bredesen announce the launch of the Rural Opportunity Initiative, a program designed to focus on removing barriers to job creation in rural Tennessee with an approach that is fiscally sound. Tennessee already offers companies who expand or locate here an opportunity to receive a credit on their tax liability if they invest new capital and create new jobs. It's part of a program called the Jobs Tax Credit. The more companies invest and the more jobs they create, the greater their future tax liability is reduced. In other words, Tennessee is not using current taxpayer dollars to incentivize job creation, but offsetting future tax liability by business owners to attract investment, usually over a 15-year period.
Many growing Tennessee companies have already taken advantage of the Jobs Tax Credit. The problem is the vast majority of economic development projects qualifying for the Jobs Tax Credit come from about six Tennessee counties.
What ROI will do is offer an additional tax credit over a 3-year or 5-year period if the company invests in a rural Tennessee county where unemployment and poverty levels have been historically high. The return on this investment will be more vibrant rural communities in Ten nessee where young people have a good reason to do well in school and make a life for themselves in their hometowns.
In addition, the governor highlighted the Rural Opportunity Fund, a $12 million pool of public and private dollars aimed at providing important growth capital for rural Tennessee companies.
Still, site selection experts caution us companies won't take advantage if they can't attract an educated local workforce committed to lifelong learning and developing new, competitive skills. Incentives work when partnered with a rural community committed to providing a productive, competitive workforce as well.
