ADVERTISEMENT
ADVERTISEMENT
Tennessee Gov. Bill Lee, left, leads his first cabinet meeting, Tuesday, Jan. 22, 2019, in Nashville, Tenn. At right is Blake Harris, his chief of staff. (AP Photo/Mark Humphrey)

NASHVILLE — Tennesseans will have to wait until Gov. Bill Lee unveils his first proposed state budget in March before learning what the state agreed to on a capital grant to help persuade Volkswagen to build its $800 million, 1,000-worker electric vehicle facility in Chattanooga.

"It's one of our capital grants and so the governor and the General Assembly will be discussing it and that will be part of the budget when the governor delivers his proposed budget on March 4," state Economic and Community Development Commissioner Bob Rolfe said Friday.

Rolfe's comments came following his budget presentation to Lee in which he asked for a $126.2 million increase in departmental spending for the 2019-2020 budget, which would take effect July 1. The VW project wasn't included.

The commissioner said the amount was determined as part of the negotiations with the German auto manufacturer.

"That was part of their conversation. They wanted a definitive number before they made the commitment to expand in Tennessee," Rolfe said. "And again, it was another competitive process of where they were going to put that expansion."

Asked what other states were in play for Volkswagen's move into electric vehicle production, Rolfe said the company didn't share that but added "we are aware they had conversations with a couple of other states."

The department is seeking $90 million for its FastTrack Job Development program, which helps offset new and existing companies' expansions in areas ranging from job training to infrastructure.

During his presentation, Rolfe, who worked for former Gov. Bill Haslam and was kept on by Lee, hit on several programs the department has targeting rural communities, including economically distressed counties, a major focus of Lee's.

In the new budget, Rolfe is seeking $10.5 million for the Rural Development Fund Grants program, as well as $10 million for Year 3 of a state initiative to aid internet broadband development in underserved rural areas.

Rolfe said there's great interest in the broadband grants among the state's rural electric cooperatives.

With regard to Volkswagen, the company has already received more than $800 million in federal, state and local incentives in the past decade, making it the most richly awarded business ever in Tennessee and one of the most subsidized among U.S. automakers.

The $554 million in incentives offered to VW to land the automaker in 2008 equaled $277,000 per job. Seven years later, state and local officials agreed to an additional $260 million of incentives for 2,000 more jobs to build the Atlas SUV, or $130,000 per job.

VW's new plant is expected to begin running in 2022. Lee warmly embraced the project in an interview earlier this month introducing the "technology of the future" here that would signal to companies world-wide "that Tennessee is a good place to invest."

Budget presentations continue next week.

Contact Andy Sher at asher@timesfreepress.com or 615-255-0550. Follow him on Twitter @AndySher1.

ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT