In a classic chicken-and-egg debate, Democrats and Republicans on Capitol Hill are at odds over funding for the Haywood County megasite, a large tract of land slated for industrial development meant to attract a large employer to rural, economically depressed West Tennessee.
Democrats are asking where the funding is for the project. Republicans are asking where the project is for the funds.
Democrats brought up the issue in a press conference on Monday that emphasized the importance of job creation, asking why Gov. Bill Haslam didn’t include money for the West Tennessee megasite in his budget proposal.
Haslam expressed his dismay this week that Democrats have taken such an approach.
“I’m kind of disappointed in the partisan nature of the way they handled that,” Haslam said. “We actually sat down and had that discussion with them.
“They understand there is already a lot of money set aside. I’ve said more will follow once we have a plan for how the money that’s already there is used. We’ve had all those conversations in private, and they walked away saying, ‘OK, we understand it, and we agree.'”
The state has put aside $34.7 million as a start for the infrastructure that will be required at the site. But in order to get the site ready for a business, much more money is expected to be needed. One estimate for the total is $65 million.
Democrats included the megasite issue as part of their public show of frustration about how the legislative session has gone, noting a perceived lack of attention to unemployment thus far.
Haslam took exception to the Democrats’ presentation.
“I was disappointed in their tone,” Haslam said. “It was more of a partisan statement than anything else.
“I think the point is this: In Tennessee, we’re out proactively working to bring jobs to Tennessee, and we’re going to continue to do that. We’ll do that by setting the right environment and being aggressive about going out and recruiting businesses.”
Democrats derided the administration’s deployment last week of a roving fleet of three refurbished, stimulus-fueled vehicles known as “career coaches” to match-make Tennessee’s jobless with jobs. Sen. Lowe Finney, D-Jackson, chairman of the Senate Democratic Caucus, referred to the coaches as “RVs.”
Rep. Craig Fitzhugh, D-Ripley, the Democratic leader in the House, said in a formal statement, “They’re telling rural West Tennessee how to apply for jobs, yet the governor didn’t include the West Tennessee megasite in his budget. It doesn’t make sense.”
The megasites have become mega-factors in economic development for the state. Barely any political discussion about the impact of government-enticed jobs in Tennessee is held without mention of the state landing major businesses at two other megasites in recent years.
One is the much celebrated Volkswagen plant in Chattanooga. The other is the Hemlock Semiconductor site in Clarksville. Each was a $1 billion investment by the company, and each was hailed as a major coup for the state in economic development. The idea behind the sites is to have necessary infrastructure in place on the front end, making a site ready for a business looking to locate. The megasites alone do not accomplish the goal. The state offers substantial incentives to attract the businesses.
The enticements can include tax breaks, job training and infrastructure worth hundreds of millions of dollars. Incentives can even extend to job credits for nearby suppliers of the major companies or, in the case of Hemlock, tax credits for customers of the company. The efforts can involve creativity, such as establishing a job training link between Hemlock and Austin Peay State University in Clarksville.
The megasites are viewed as powerful long-term job engines that will sustain smaller businesses involved or peripherally connected with production at the major plant. The success of the two other megasites — one in East Tennessee, the other in Middle Tennessee — has made the lack of a tenant at the Haywood County site stand out all the more.
Haslam officials say they are expecting to bring principal figures together in the next two weeks to address the West Tennessee site.
The Haywood County site is in a rural area, making infrastructure needs especially significant. The site sits just north of Interstate 40 near Exit 42.
While most state officials see the megasite as a golden opportunity, not everyone has been on board with the concept. Residents of the area expressed concerns early in the process about being overwhelmed by the state development.
At the Capitol, sorting through the politics of the issue is not easy. But it is no coincidence and not very surprising that Democrats most interested in the issue — and some who happen to be in leadership positions in their caucus — are from West Tennessee.
Area Democrats have run for office on the job-development potential at the megasite. Haslam did too. In fact, one of the noteworthy events of Haslam’s run for governor last year was the use of Haywood County Mayor Franklin Smith, a Democrat, in a Haslam television ad, saying Haslam used his influence to help protect funds for the megasite.
“I don’t care if he is a Whig or a Mugwump,” Smith said in the campaign spot. He was supporting Haslam.
Haslam and other Republicans would clearly like the site to succeed. Should a major company locate there, it could be a major success story in their stated goal of creating jobs in the state. Haslam has warned, however, that Tennesseans should not expect many “home runs” like the recent megasite successes. He has said the state may need more “singles and doubles.”
The state bought the land for the West Tennessee site for $40 million. The entire site is 3,800 acres, and the core area for activity is 1,780 acres.
“You can’t get anyone in there until you’ve got your infrastructure in place,” House Speaker Emeritus Jimmy Naifeh of Covington said this week. “We figured there would be some $30 million-$35 million in the budget for the megasite this year.”
When Haslam presented his budget in the State of the State address on March 14, there was no funding for the megasite.
Naifeh was going to speak to the Brownsville-Haywood County Chamber of Commerce before the governor’s speech and asked for a meeting with Haslam, thinking there was going to be money in the budget for the site. He talked with Deputy Gov. Claude Ramsey. He learned the State Building Commission hasn’t even had the issue before it to approve use of the $35 million.
“They use different reasons as to why they haven’t,” Naifeh said.
The Building Commission has the power of approval over release of the funds. The commission has seven members — the governor, speaker of the Senate, speaker of the House, commissioner of Finance and Administration, the secretary of state, comptroller and treasurer. Democrats note that the West Tennessee megasite was not on the agenda of the Building Commission released Monday.
“The position the administration has now is that until that gets approved by the Building Commission, why do we need to put some more money in there? Well, the commissioner of F&A is the one that sets the agenda on the Building Commission,” Naifeh said.
Naifeh noted that West Tennessee members of the Legislature supported efforts to establish the megasites in East and Middle Tennessee.
Lt. Gov. Ron Ramsey has said when there is a request put forth for the funds the commission will review it and act, saying he anticipates any money needed will be released “expeditiously.”
Bill Hagerty, Haslam’s commissioner of economic and community development, said Tuesday a lot has to be done before anyone starts building a plant. He prefaced his observation with what has become the standard line among Republicans on the Hill.
“Jobs aren’t created through legislation on Capitol Hill. Jobs are created out here in the economy. That’s where we’re focusing our effort,” Hagerty said. “Second, on the megasite itself, we’ve got $34.7 million in right now for that project. They’re working through engineering studies right now. They can’t start digging until they complete the engineering work.”
House Minority Leader Fitzhugh, who like Naifeh is from near the megasite, pointed to a time element in the issue.
“The longer we wait, the longer it’s going to take for the money to get in the pipeline and have the infrastructure done,” Fitzhugh said, adding that the $65-million estimate is less than some had anticipated.
“Another $30 million-$35 million, we could have this thing ready to go in 12 to 18 months, and we could start employing people.”
Republicans have stuck to their line about government’s role. Haslam has said repeatedly that jobs cannot be legislated. Ramsey has said that government does not create jobs.
“It’s amazing that we watch Barack Obama spend over a trillion dollars of our grandkids’ money to create jobs. Yet not one job was created,” Ron Ramsey said this week. “Again, the government does not create jobs. Businesses create jobs.
“I’m a small businessman myself. I’ve said many times that what I want out of government is absolutely nothing. Just leave me alone.”
But Democrats who want to see the Haywood megasite succeed see hypocrisy in Republican statements that jobs cannot be created through legislation.
“In this case, it takes some infrastructure money, and that comes directly from the state,” Fitzhugh said. “Now that’s pretty close to legislating jobs.”