State Spending $229.7 Million, City And County $86.2 Million
posted August 29, 2008
State and local governments will receive over $1 billion more than they spent in incentives on the Volkswagen plant at Enterprise South Industrial Park, Tennessee Commissioner of Economic and Community Development Matt Kisber said at a press conference Friday morning.
He said a cost benefit study by Dr. William Fox, director of the UT Center for Business and Economic Research, "shows Volkswagen's investment in Tennessee will bring a significant economic benefit to both the people of Tennessee and the Chattanooga region."
Commissioner Kisber said the city, county and state "made prudent, reasonable and justifiable investments" in the huge VW project.
He said the assembly plant will boost incomes in the region by $511.1 million and generate more than $55 million annually in new tax revenues for both the state and local governments."
Commissioner Kisber said, "Taken together, state and local governments will receive more than $1 billion more than they pay out in incentives over the life of the project."
Dr. Fox said, "We've taken a very conservative approach to estimating the economic impact of the VW project. If this project is successful and expands, the region could see an even more pronounced benefit."
Officials said the state will put $229.7 million into the project and receive $756.7 million in new tax revenues.
They said the city and county will contribute $86.2 million and receive $642.7 million in new tax revenues.
In addition to the 2,000 jobs at the VW plant, the report estimates that another 9,477 jobs will be created.
County Mayor Claude Ramsey said, "The report confirms what we've believed as we've progressed in our discussions with Volkswagen. This is a project with enormous, positive implications for the economy of Hamilton County and much of Southeast Tennessee."
Mayor Ron Littlefield said, "We've made solid, prudent business decisions in evaluating the costs and benefits of this project. In Volkswagen's announcement, the people of Chattanooga, Hamilton County and all of Tennessee are clear winners."
Commissioner Kisber said he would go before the state funding board on Friday afternoon to secure funding for the VW project. He said he expected the request would gain unanimous approval.
Incentives were listed at:
$6.8 million job tax credit
$71.9 million super job tax credits
$27.6 million enhanced industrial machinery credit
$80 million for a pad-ready site
$70 million for additional infrastructure
$18.8 million for roads, including the interstate connector
$81.2 million in state workforce investments
$3.4 million in recruitment, screening and on-the-job training
$40 million for a training center
$13.8 million for training center operating funds
$24 million for fast track training
$2 million for marketing and promotion
$40.2 million in land
$6 million for a "green" welcome center
$133 million city and county in lieu of property tax incentive
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