The Tennessee Senate voted today to approve the sale of state bonds to help finance the new Volkswagen and Hemlock plants.
Governor Phil Bredesen and Economic Development Commissioner Matt Kisber have said the bonds are necessary to carry out state promises for infrastructure at the two plants. The bonds will also pay for some pre-training of prospective employees.
House Finance chairman Craig Fitzhugh says the unusual bonds have been questioned at every step of the legislative process.
“We’ve had some questions about it, and we’ve tried to get those answered so everybody understands where this, how it came about and why it came about, and … why we’re using this method as an alternative, or a different option.”
It is the first time Tennessee has used such bonds for development. Previous incentive packages were paid out of the annual budget — that is, cash — but under the bond system, Tennessee will borrow the money to put the plants on the ground.
Finance Commissioner Dave Goetz said this week the projects will easily pay for themselves in new revenues generated by their business.
The bond authorization and the bill to spend the money will be on the agenda of the state House when it meets Monday night.
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