Senate Speaker Ron Ramsey questions Governor Bill Haslam's FastTrack changes

Senate Speaker Ron Ramsey questions Governor Bill Haslam's FastTrack changes

March 9th, 2012 by Andy Sher in News

Lt. Gov. Ron Ramsey

Lt. Gov. Ron Ramsey

Photo by Associated Press /Times Free Press.

NASHVILLE - Senate Speaker Ron Ramsey voiced reservations Thursday about Gov. Bill Haslam's plan to expand the state's FastTrack economic development incentive program into other areas.

Ramsey said he likes the FastTrack program as is. The program funnels taxpayer money through local development boards or other local government entities in the form of reimbursements for infrastructure and job-training programs.

Haslam has legislation that adds a third leg to FastTrack: It would provide more flexibility to economic development spending, which officials say companies favor.

The list includes, but is not limited to, grants or loans for retrofitting, relocating or purchasing equipment; building repairs and improvements; and temporary office space or other temporary equipment related to relocation or expansion.

The bill states that such funds would be used "in exceptional circumstances when the funds will make a proportionally significant economic impact on the affected community."

But Ramsey makes a distinction between the current uses for economic development funds and Haslam's proposed additions.

"I think we're doing for businesses what they can't do themselves. If a new company's coming in, we ought to put in the infrastructure. We need to build the roads. We need to put in the sewer lines. We need to make sure the gas line is there and the utilities."

Buying, renting or renovating space is different, he said.

Last year, Ramsey fretted after it was discovered then-Gov. Phil Bredesen had committed to giving Electrolux $100 million for construction and equipment costs, on top of other incentives, in exchange for the company building a plant in Memphis.

"I'm still concerned about that," Ramsey said. However, he didn't rule out going along with the proposed changes or a modified version of them.

Haslam wants to begin moving away from existing tax incentives and tax credits. Ramsey said he agrees with that effort.

The governor's spokesman, David Smith, said that if the changes are approved, they still would go through local industrial development boards "as is the current process."

In other state matters Thursday:

• Senators voted 30-1 to approve an administration bill requiring Amazon to begin collecting Tennessee sales tax in 2014.

"I'd really like to thank the governor's office for working this out," said the bill's sponsor, Senate Finance Committee Chairman Randy McNally, R-Oak Ridge. He had criticized the original oral deal that Bredesen struck with Amazon.

The Internet retailer built two $139 million distribution centers in Chattanooga and near Cleveland, Tenn., employing about 4,000 full-time and seasonal workers.

• State tax collections for the general fund topped estimates by another $23 million in February, officials announced. The general fund is now $238 million over original projections for the first seven months of this fiscal year.

State Finance Commissioner Mark Emkes said in a news release the growth indicates "an improving economy in Tennessee," but he warned that rising gas prices could stifle future improvement.

Sales-tax collections fueled most of last month's growth, with about $4 million coming from corporate franchise and excise taxes.

It was the 23rd straight month Tennessee has experienced sales-tax growth as the state recovers from the recession.