Bredesen plants a seed to grow rural Tennessee
Monday September 24, 2007
Today's Topic: State invests in rural areas
From: the Tennessean
Opinions, page 8A
Our View
Usually when economic development and business startups are spoken of in Tennessee, the discussion is about the areas in and adjacent to Nashville, Memphis, Knoxville and Chattanooga.
That leaves a lot of real estate. Much of the state's population lives in rural areas outside the four largest cities and, all too often, these areas are passed over for new businesses and job creation. Typically, rural counties have the highest unemployment rates in the state.
Gov. Phil Bredesen is hoping to change that, through a tax credit program that will focus on areas including the Cumberland Plateau and the Tennessee River valley.
The Rural Opportunity Fund has been launched with $1 million in seed money from the state, according to The Associated Press. Banks are being encouraged to add to the fund through state tax credits. Small businesses that are not eligible for commercial bank loans will then be able to borrow from the fund, which Bredesen hopes will eventually total at least $10 million.
As a second component of the program, the state is working with private lenders to start a venture capital pool to encourage rural-area business expansion.
The governor announced last week that this program would be a major goal for his second term. He and his Department of Economic and Community Development should be commended for this effort. It's refreshing in a time when so many elected leaders choose to coast through their closing years in office.
This endeavor is especially important. The disparity in economic opportunities between Tennessee's cities and its small towns and rural areas has been a contributing factor to the state's low rankings when compared with other states on education, health care and other desirability factors.
More jobs, and better ones, will raise the standard of living for rural Tennesseans. Small towns will be better able to keep residents from relocating for economic reasons, and small schools should benefit, as well.
There are some caveats.
For this plan to work, of course, there must be broad participation by banks and other lenders and, frankly, they are not being asked to take a major risk.
As Bredesen explained to the AP, "We're looking for businesses that are not cold startups; they're ones that have been able to get themselves going a little bit.
"This is about trying to find businesses that are on the cusp of becoming successful, or are already successful and need to expand."
As for state officials, it's important that they keep the rural development program well-diversified. It should not, for example, all be focused on the up-and-coming biofuels industry. The state has put a lot of effort into biofuels research and development, and it may create many new jobs, but it's relatively new, and rural Tennessee has a range of resources that would be suitable for other industries, as well.
And finally, any new participating businesses should stress environmental responsibility and efficiency, because rural Tennessee is valuable not just for its untapped economic potential, but for its scenic beauty. That is, after all, why many call it home.
