VW Came For The Incentives - And Response (4)

Tuesday, January 27, 2009

On Monday, at the Pachyderm Club meeting the four Chattanooga mayor candidates spoke. During Mayor Littlefield's speech he repeated again that the main reason that Volkswagen is coming to Chattanooga are the “environmental initiatives.”

In the question and answer period, I asked Mayor Littlefield, “Many public officials have said that the environmental initiatives and the wonderful downtown were the reasons for VW coming here. Do you think that maybe the $650,000,000 in tax incentives, almost twice as much as Alabama offered, might have had a little something to do with it?”

The mayor’s answer was vague when he said something about not knowing what the Alabama incentives were and some obtuse story about how the Germans had assured him that the incentives were not the deciding factor. Since he doesn’t seem to know what the Alabama incentives were, I am going to try and provide some information.

One story was in the Chicago Tribune on August 29, 2008. This article helps put Tennessee/Chattanooga offer in perspective.

1. Alabama offered “$385 million, the most that state had ever offered for an auto project.“
2. “A report by Mississippi’s economic developers shows incentives totaling $294 million were provided Toyota in 2007 for an assembly plant at Blue Springs. Kia received about $324 million in incentives from Georgia….”
3. “…..Linda Swan, a spokeswoman for the Alabama Development Office, said Tennessee’s $577.4 million package is “certainly larger than any of ours…..Alabama Development Office director Neal Wade said the Tennessee package is “the largest.. We went as far as we could go,” he said.”

If Mayor Littlefield needs another source he could have read the Chattanooga Times Free Press. Its headline on July 24, 2008 said, “Chattanooga: VW incentives largest in state.” It went on the say the following: “Tennessee offered its richest incentive package — and perhaps the most government assistance and tax breaks ever for an American automobile plant — to lure Volkswagen to Chattanooga.”

It went on to say, “Sujit CanagaRetna, senior fiscal analyst with the Southern Legislative Conference group and an expert on auto industry incentives in the South, said Tennessee’s incentives could set a new record for an auto plant…..”

It also said that Tennessee’s previous high was three years ago to land the headquarters for Nissan. That package was only $197 million versus the $577 million Chattanooga offered for VW.

There are about a hundred other sources, but I think you get the point. Mayor, if you want to research this yourself there is a thing called “Google.” It only took me about 30 seconds to find.

In any event, if it wasn’t about incentives, why did we lose KIA and Toyota. If it wasn’t about incentives, why did we have to offer incentives 70% higher (“almost twice as much”) than Alabama and set a new all time record? I am sick and tired of our public officials perpetuating this sustainability and environmental myth as a major reason that the VW plant located here.

Anyone over the age of 13 that can read should get that VW came because we basically gave away the store. We bribed them to come. Whether or not this offer was insane or not remains to be seen. No matter, public officials need to tell the truth, not spin for the next election.

The reason for this spin about the “green” reasons for VW coming here is not only being perpetrated for a mayoral election, it is justify $500 million in taxpayer financed downtown development that is a tax revenue flop which was sold on the idea of sustainability. It is also to enhance the efforts of a new group of Venture 2000 types who want to start another round of environmental wacko idiocy. The question is, are you going to believe the politicians or your lying eyes?

Tim Price

* * *

I wish people would stop calling for others to do a "Google search" when they need information. We now know that Google consumes an average of 0.6 watts of power for each search. 1,667 of these and we've burned up 1 kilowatt of power, power that it took fossil fuels, in part, to generate.

If we're consuming more power, how do we maintain the moniker "The Environmental City" any longer?

So stop with calling for those Google searches already. The greenies will invade our fair county and might even demonstrate and stuff, consuming more power, and then we might even have to put up with Big Al and the Boys.

I found it interesting, though, that Mayor Littlefield constantly referred to the availability of government money during his talk on Monday. His was federal funds this, state funds that, throughout and he stayed behind that table and podium.

In contrast, his opponent Mr. Healy asked if the microphone was wireless then immediately walked in front of the table and spoke to everyone as though he had nothing to hide. Powerful body language, of which observers should take note.

Where the mayor spoke of "government funding," which is our money in the first place, Mr. Healy spoke of business initiatives to create jobs and cuts in spending. Where the mayor spoke of additional spending, Mr. Healy spoke of thrift and compared government to business where every dime must be accounted for, where waste must be cut when the economy gets tight.

My, my, such a diversity of philosophies. Where the incumbent would spend more money, the challenger would cut spending and develop a better business climate. But perhaps this comes from having different backgrounds, where one has been a bureaucrat the other has been a businessman having to earn his money.

Royce E. Burrage Jr.

* * *

The VW deal is done and the contract is signed, and if all goes well our community will profit in a big way. Investment of any kind is never without risk, and it could fail in a big way. I for one would rather stand up and try, then do nothing to turn this economic ship around.

I usually agree with you guys and frankly wish that the most impressive elected official in Hamilton County, Rhonda Thurman was running for mayor of Chattanooga. I would have signs plastered everywhere in the North Chattanooga area she represents so well. Since she is not on the list of choices, I will work within the available options, and what I know to be factual about our current mayors talents. Make no mistake about it, our current mayor is a major talent.

While Mr. Healy may have good intention, retail sales and a period in the recreation program is not enough for me to believe that this gentleman should be placed in charge of millions of dollars and employees.

Love ya guys, but I am a defector on this one.

Allison Graham

* * *

Now c'mon Mr. Price,

We've been over this before. Yes there are incentives for VW, and yes I agree that all such government spending should be reviewed carefully and thoughtfully before a deal is done.

That being said, no one is "spending" $650 million. Hard cash outlays vary from $150 to $250 million depending on the list of infrastructure and training programs, etc.

Listing land given to VW as if it was "spent" should not come into play, in my humble opinion. Who was going to buy it? It had been sitting fallow since VAAP closed in the 70's. Seems to me swapping land for a $1 billion investment in construction of real assets is a "good trade" as I see it.

Same thing for the "deferred" taxes on said property. I don't care if they don't pay property tax for 30 years as the land was providing zero taxes at present (and zero jobs too).

At least the local economy will receive an infusion of $1 billion in real investment in construction costs and afterwards the real benefit from 10,000 to 20,000 (depending on who's figures you look at) "good wage" jobs that will be primarily spent in this same community on housing, groceries, clothes, education, etc., etc.

That "incentives" horse is about dead - time to quit beating it.

C. Graham

* * *

Whatever happened to a referendum in this city and county? If taxpayers could vote on where their money is spent, there might be a different outcome on where these politicians spend our money.

Individuals are hurting in this economy. Politicians are oblivious to this. Politicians on every level, including property tax appraisers, need to consider the average person's situation. The county appraisers went back four years to increase the value of homes in Hamilton County. Values are way down over the last year or two, but to increase our assessments, they go back up to four years. A mortgage company knows the true value of a home is reflected in sales within the last three months. A mortgage appraiser can only go back three months to place value on a home.

In addition to the reassessment, a property tax increase is coming. They are going to impose it on us, to pay for VW and downtown. Most households have very little if any money left after taxes. Do you think your public officials care? The answer is no, they don't. The citizens of Hamilton County cannot afford a property tax increase. Littlefield is a career government worker, he has no clue what it is like to live on a budget. The city and county need to cut back like we do in our households.

Some of us don't want state money or federal money which is the main problem with our economy. We are smart enough to know, state and/or federal money is going to end up costing us money. We are now going to have to worry about the environment. The economy will take care of the environment. Soup lines don't put out much carbon and I am afraid our government officials are sending us all to soups lines.

Chuck Davis

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