Auditors are finding fault with a state fund meant to help startup companies, saying there’s not much chance the program will earn back the $200 million put into it before it ends in 2021.
The Tennessee comptroller’s office said in an audit released Thursday that the state has received just $5.3 million back from TNInvestco, the 2009 program billed as a way to stimulate the economy by injecting money into the private sector. The fund was part of then-Gov. Phil Bredesen’s response to the recession.
Under
TNInvestco, Tennessee gave tax credits to 10 investment groups that they then resold to private firms. Those sales generated $149 million intended to be invested in start-up companies. Each investment group promised that it would split profits evenly with the state.
But so far, Tennessee’s received back just 2.6 percent of what it originally put in. And, auditors add, participants haven’t done a good job of tracking how many jobs the program has actually created.
The findings were part of a broader critique of the state Department of Economic and Community Development’s incentives for businesses.
Auditors say
FastTrack infrastructure and training programs aren’t keeping up with job creation figures either. They also say the companies that take part in FastTrack tend to pay lower wages than they promise when applying for the grants.
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