Worth the Price of Investment
Published Sep 02, 2008
How much will Tennessee get in ROI from the incentives it used to entice Volkswagen to build an assembly plant in Chattanooga?
Plenty, says a new study by the University of Tennessee’s Center for Business and Economic Research. The center concludes the plant will boost incomes in the region by $511.1 million annually and generate more than $55 million annually in new tax revenues for state and local governments.
Matt Kisber, Tennessee’s economic development commissioner, points out that the study shows that every dollar state and local governments have spent on the project on a “one-time” basis will yield a dollar in new tax receipts on an ongoing basis.
The report calculates that over the 30-year life of the project, the state will contribute approximately 58 percent of the value of the investments, with local governments contributing 38 percent and the federal government contributing 4 percent. On a cash-flow basis, the state will contribute about $230 million and receive $756.7 million in new tax revenues over the 30-year life of the project.
In addition to the 2,000 jobs created at the plant, the report estimates another 9,477 jobs will be created in the region through construction and supplier activity.
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