The Nashville-based Beacon Center has released its annual dissection of what it deems “the most egregious examples” of sloppy state and local government spending across Tennessee.
This year’s “Pork Report” is particularly plump, said Justin Owen, the free-market think tank’s president. In fact, it’s “the fattest in our nine-year history, exposing a record $609 million in waste, fraud and abuse,” he told reporters during a press conference at the Capitol on Wednesday. Last year’s Pork Report rooted out a mere $511 million.
“The 2014 report continues to prove that politicians’ and bureaucrats’ eyes are bigger than taxpayers’ stomachs,” said Owen.
According to the report, “Political pet projects continue to wreak havoc upon Tennessee’s bottom line; fraud and abuse are rampant, particularly at the local level; and state and local governments persist with cherry-picking cronyism for supposed ‘economic development’ — redistributing wealth from one business to another, often with no guarantees that jobs will be maintained long-term — and heaved on the backs of Tennessee taxpayers.”
Owen noted that many of the sub-primest cuts in this year’s Pork Report are city or county projects, which account for hundreds of millions dollars in “outlandish spending of their own.”
However, the “pork of the year” prize for most awful example of publicly financed offal went to the Tennessee Department of Labor and Workforce Development, a “repeat offender.” The department was crowned with the “dubious honor,” said Owen, for its ongoing inability to get a handle on the problem of handing out unemployment benefits payments to “all the wrong people,” like those who are in prison, or dead.
Owen said that the department “has shelled out $180 million dollars to ineligible recipients.” Citing media reports and Tennessee state comptroller probes, the Pork Report states, “Auditors last year discovered that the department had doled out $73 million in erroneous benefits, including dead people and state workers.” The Pork Report said that followup investigations have found the issues haven’t gone away, and the misdirected payout amounts have risen dramatically since the snafu first surfaced.
Owen in fact lauded department workers and officials for, he said, “working very hard it seems to clean up their mess.” At the same time, though, citizens who are legitimately deserving of unemployment assistance are running into any number of headaches as they try to obtain benefits.
“We have heard cases and cases of unemployed Tennesseans who can’t even get through to the unemployment hotline. Yet $180 million in checks are going out to people who shouldn’t be on benefits,” said Owen. “If they could get their act together, not only would they be able to help the people who are truly unemployed — the intended beneficiaries of the program — but they could leave far more money in the pockets of Tennessee’s businesses who are paying this tax, who could turn around and hire people.”
“It’s a pervasive cycle, and it is unfortunate that we’ve had to make them our ‘pork of the year’ recipient, but it is important for taxpayers to know that this type of thing is happening in our state,” said Owen.
Under a section titled “Shelling Out the TNInvest-Dough,” the Pork Report asserts that the Tennessee Small Business Investment Company Credit Act has had half a decade to “prove its worth, or lack thereof” since it was conceived under the administration of Democratic Gov. Phil Bredesen. The Beacon Center’s verdict is that the tax-credit-financed venture-capital investment scheme is obviously a hog wallow of financial inefficiency.
“The most recent data available shows that (TNInvestco financing) has supported the creation of 1,400 hundred jobs, some of which are outside of Tennessee,” the Pork Report states. “That represents a massive $79,428 taxpayer investment for every single job, including those in other states. While the jobs created as a result of this program are certainly welcome, one might rightfully wonder if that much taxpayer money would better be spent elsewhere, such as reducing the tax rates for all Tennessee businesses, rather than taking money from those businesses and handing it to a select few at a cost of tens of thousands per job.”
The Tennessee Department of Economic and Community Development offered the following emailed statement when asked to comment on the Pork Report’s conclusions:
“The TNInvestco program was created in 2009 during a time of great economic duress nationally. Lawmakers at the time acted with the best of intentions over 2009-10 to help jump start new businesses in Tennessee. TNECD’s ongoing role with the program is to ensure all administration and reporting take place in a manner consistent with the 2009 law. The department has continued to work with the legislature to both increase transparency and clarify the administration of the funds.”
Nashville Tea Party activist Ben Cunningham joined Owen during the press conference. He indicated that profligate spending in Tennessee is a bipartisan malady. Republicans dominate the state Legislature and have controlled the executive branch for four years.
“We have many bureaucrats and elected officials who believe their grand, good intentions for our money are somehow more worthy than the good intentions we have for our money as we spend it as a family,” said Cunningham. “So they don’t mind taking it from us out of our family budgets, and that is where every dollar that government spends comes from.”
However, Owen did say the Tennessee Legislature should be commended this year for restraining itself from baiting lawmakers’ districts with lines of budget chum, which has been the practice in previous election years. And also, Tennessee is often noted for its low burden of overall taxation and debt, which he said needs encouraging.
“We are proudly one of the lowest-taxed states in the nation, and per capita the lowest debt state in the nation, which is a great thing,” he said. “But if we don’t have things like the Pork Report, that will go away, because other states are competing to get that No. 1 ranking, and if we don’t stay on top of that by exposing waste and being even more efficient and effective with taxpayers’ money, then we will lose that status.”
“Just because we are the best, doesn’t mean we are the best we can be as a state,” he said.