Tennessee Economic and Community Development Commissioner Matt Kisber and other local and state officials discussed the incentives from the VW plant locating in Chattanooga.

State and local governments are offering about $577.4 million in assistance and tax breaks for Volkswagen Group of America over the next 30 years to build its $1 billion auto assembly plant in Chattanooga, officials said today.

But a new study released today concludes that the benefits from the VW plant and the supply businesses it will draw to the region easily exceed the record high incentives for Tennessee by generating over $11.8 billion in personal income growth over that period.

Also, the study by the University of Tennessee’s Center for Business and Economic Research estimated new total tax revenue of nearly $1.4 billion.

In addition, the plant and spin-off companies are expected to create 11,477 jobs, according to the study.

Matt Kisber, the state’s commissioner for Economic and Community Development, said the analysis shows the VW plant will boost incomes in the region by $511 million annually and create more than $55 million in annual new tax revenues for state and local governments.

“This third party analysis shows Volkswagen’s investment in Tennessee will bring a significant economic benefit to both the people of Tennessee and the Chattanooga region,” he said.

In a meeting with reporters and editors of the Chattanooga Times Free Press this morning, Mr. Kisber joined Chattanooga Mayor Ron Littlefield and Hamilton County Mayor Claude Ramsey to defend the assistance to be given the automaker.

Dr. William Fox, director of the UT center, said it took “a very conservative approach” to estimating the economic impact.

“If this project is successful and expands, the region could see an even more pronounced benefit,” he said.

Volkswagen plans to build a 1.9 million-square-foot plant by early 2011 at Enterprise South industrial park and projects it will produce at least 150,000 vehicles for the 2011 model year.

VW picked the 1,350-acre Chattanooga site over a similar-sized tract in Limestone County, Ala., near Huntsville. The Alabama Development Office said Alabama offered VW a package of incentives valued at $381 million, including $205 million for the site and related infrastructure, $62 million for employee education at a new training center and $114 million from statutory and tax incentives.

For complete details, see tomorrow’s Chattanooga Times Free Press.

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