Beacon Center of Tennessee » government waste

GM: From the White House to the statehouse

editor — Fri, 27 Jan 2012 16:08:22 +0000

Beacon president & CEO pens an article for the Daily Caller, a national publication, on how General Motors has turned to state governments for taxpayer handouts after its historic federal bailout. This follows a breaking investigative report on the subject by Chris Butler, Beacon’s director of government accountability and editor of TennesseeWatchdog.org. The article is reprinted below. Click here for the original investigative piece.

by Justin Owen

General Motors is now notorious for reaching deep into the pockets of taxpayers to bail itself out of a bad situation. In 2008, under the Troubled Asset Relief Program, or TARP, President Bush doled out the first round of what eventually became $50 billion to the Detroit automaker. With that, the United States government became a majority owner in the company.

This did not sit well with most taxpayers, who cried foul and rightfully so. Soon thereafter GM became known by the more appropriate moniker of “Government Motors.” Fearing a consumer backlash against it for this historic bailout, GM attempted to distance itself from the Washington scene. But taxpayers weren’t fully off the hook.

Rather than retool its business model to become competitive in the free enterprise system, GM turned to another, smaller government teat. Or several of them, actually. Since its grand TARP bailout, the company has received another $1.7 billion in taxpayer-funded grants and tax abatements, not from the federal government, but from states across the country.

Some might call this coincidence, but GM freely admits it is outright strategy. In a recent interview with TennesseeWatchog.org, a project of my organization, a company spokesman stated matter-of-factly that, “We are increasing our activity with the states obviously, in the communities in which we operate.”

How right he is. Not long after the TARP bailout, GM began ramping up its lobbying arm in several states—including Tennessee, Maryland, Indiana, and Texas. Over the next few years, public filings reveal the company doubled its lobbying expenditures in Tennessee, increased them by 60 percent in Indiana, and by 78 percent in Texas, while also hiring in-state lobbyists in each of the states to give it the proverbial boots on the ground.

The payoff was handsome. State officials in Tennessee just awarded GM more than $1.5 million in grants, part of which went to reopen a plant in Spring Hill, Tennessee. This comes on the heels of a $17 million taxpayer handout in 2009, after which the company immediately packed up and shipped the jobs it had promised Tennesseans back to Michigan. With this track record, there is no certainty it won’t happen again if another state forks over more money to lure them away.

GM’s increased lobbying efforts also helped the company obtain a $3 million grant through the Maryland Economic Development Assistance Fund and a $1.5 million grant from the Maryland Department of Labor, Licensing and Regulation. In 2009, local Indiana officials announced a $2 million incentive package for the GM assembly plant in Fort Wayne. And in Texas, the company recently applied for refunds on state sales and use tax payments through a state incentive program. For GM, the savings would amount to $3.75 million.

Apparently, turning taxpayers on their heads and shaking every penny from their pockets is a profitable corporate strategy for a quasi-public car company. As of last summer, GM sat on roughly $40 billion in reserves. Yet the ribbon-cutting ceremonies with state officials across the country continue like clockwork, with taxpayers footing a lofty bill.

All the while, GM touts that it has paid back the billions of dollars that taxpayers used to prop it up in 2008. That claim itself is misleading, but even the amount it has returned to the federal government has essentially been funded—in part—by those same taxpayers via state governments. This adds a whole new meaning to the phrase “in one hand and out the other.” One thing is for sure, four years after TARP, GM has proven that it can still take taxpayers for a ride.

Justin Owen is president & CEO of the Beacon Center of Tennessee, the state’s free market think tank.

Lawmakers seek to require voter approval of tax hikes

editor — Wed, 30 Nov 2011 18:13:06 +0000

The Beacon Center’s Ryan Turbeville talks to Channel 4 News in Nashville about a state lawmaker’s proposal to require voter approval of any local property tax increases that are greater than one percent. Click here to watch the entire interview.

Tax dollars spent on booze and porn?

editor — Tue, 08 Nov 2011 17:12:37 +0000

The Beacon Center’s Justin Owen takes the state Dept. of Human Services to task for its failure to oversee a federal welfare program that gives debit cards to families in need. A WSMV, Channel 4 News investigation found that the debit cards were being swiped at adult bookstores and bars.

“Is this really how we’re helping ailing families, giving them taxpayer money to booze it up and enhance their porn stash?” asked Owen. “This is what people are angry about these days.”

Watch the entire interview here.

Business Journal notes Beacon’s position on incentives

editor — Mon, 24 Oct 2011 14:12:14 +0000

In a feature story on state Economic and Community Development Commissioner Bill Hagerty, the Nashville Business Journal takes note of the Beacon Center’s position on economic development incentives. From Friday’s print edition:

”Free market gropus like Beacon Center of Tennessee are pushing [the Haslam administration] to lower tax rates and ditch incentives, calling them wasteful, unfair to other businesses and market distorting.”

Read a summary of the full story here.

Beacon Center comments on state’s high sales tax

editor — Wed, 28 Sep 2011 15:40:27 +0000

In an interview with the Chattanooga Times Free Press, Beacon Center’s Justin Owen calls for a reduced sales tax burden by cutting wasteful government spending, but at the same time warns against attempts to replace the current sales tax with a state income tax.

Beacon Center of Tennessee Executive Director Justin Owen countered that, saying, “I certainly think it’s good that we rely heavily on a sales tax instead of an income tax or other types of taxes.”

Dismissing the idea of a general state income tax, Owen said, “first of all, you shouldn’t tax people for generating economic growth and wealth and taxing productivity.”

A sales tax on consumption is “more even-keeled,” he said.

Still, Owen said, officials “may come to some agreement on the sales tax on food. That hits low income and seniors harder. We think we could lower the sales tax on food — if we cut and are not simply shifting taxation.”

Tennessee should look at cutting waste, fraud and abuse, reducing the size of state government or turning some functions over to the private sector, he said.

Read the entire article here.

Wasteful federal spending hits close to home

editor — Fri, 29 Jul 2011 19:47:48 +0000

As Washington hits gridlock on the debt ceiling battle, the federal government continues to send millions of dollars to local communities for “non-traditional transportation purposes,” such as sidewalks, landscaping, and lighting, notes TNReport.com. Tennessee Center for Policy Research President Justin Owen takes issue with the spending.

“At a time when our state and nation face a fiscal crunch, it appears that spending on ‘aesthetic’ and ‘cultural’ aspects of transportation is code for wasteful spending on political pet projects. Now is not the time to be spending millions of taxpayer dollars on pretty flowers and fancy lights,” [Owen said].

Click here to read the entire article by TNReport.com, titled “Federal cash funding sidewalks, bike-trails.”

2011 Pork Report uncovers $371 million in government waste

editor — Tue, 28 Jun 2011 18:25:14 +0000

NASHVILLE, TN – The Tennessee Center for Policy Research today released its 2011 Tennessee Pork Report, exposing that state and local governments across Tennessee wasted $371 million over the past year. For the sixth consecutive year, Tennessee’s premier free market think tank partnered with taxpayer watchdog Citizens Against Government Waste to document waste, fraud, and abuse at all levels of Tennessee government.

Examples of wasteful spending outlined in the 2011 Pork Report include:

$140 million to pay a European company to relocate to Memphis;
$14.5 million on an unnecessary solar energy program run by the state;
$2.5 million to provide tax credits to Nissan Leaf purchasers, which could lead to an increase in state gas taxes;
$131,000 to send utility district employees on exotic trips around the globe; and
$95,000 wasted by Nashville’s criminal court clerk who only works three days each week.

“Yet again, state and local governments failed to live up to taxpayers’ expectations by wasting their hard-earned money,” said Justin Owen, president of the Tennessee Center for Policy Research. “With our economy in dire straits, the last thing government officials should be doing is offering handouts to corporations, dreaming up whimsical environmental programs, and using taxpayer money for their personal use. It’s time for them to become better stewards of Tennesseans’ money.”

In addition to exposing wasteful government spending habits, the report also offers three effective solutions to eliminate waste and promote more responsible, transparent government. The report serves as an informative and valuable resource for policymakers and taxpayers alike.

“Tennesseans should arm themselves with the Pork Report and hold their elected officials accountable for government waste,” said Ben Cunningham, spokesman for Tennessee Tax Revolt, who participated in the report’s release. “Only then can we truly cut the fat in government.”

The litany of examples of government waste, fraud, and abuse in the 2011 Pork Report come from state and local government budgets, media reports, appropriations bills, state audits, and independent research conducted by the Tennessee Center for Policy Research.

An electronic version of the report can be found at: http://www.tennesseepolicy.org/wp-content/uploads/2011-Tennessee-Pork-Report.pdf. Hardcopies can be purchased by calling (615) 383-6431 or emailing info@tennesseepolicy.org.

The Tennessee Center for Policy Research is an independent, nonprofit and nonpartisan research organization committed to achieving a freer, more prosperous Tennessee through the ideas of liberty. Citizens Against Government Waste is a nonpartisan, nonprofit organization dedicated to eliminating waste, fraud, abuse, and mismanagement in government.

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TCPR calls proposed tax increase “outlandish”

editor — Fri, 10 Jun 2011 14:46:21 +0000

Tennessee Center for Policy Research president Justin Owen talks with Channel 4 News about Metro Nashville’s proposal to increase a Comcast public television tax by 1,200 percent. The extra $1.2 million a year would be used to purchase televisions for Metro buildings, buy a mobile production unit, and convert all public television to high-definition.

Watch the entire interview here.

Channel 4 News cites Four Lake story

editor — Wed, 30 Mar 2011 15:59:38 +0000

WSMV, Channel 4 News conducted a follow-up on a story originally published by Tennessee Watchdog, an investigative reporting and government watchdog project of the Tennessee Center for Policy Research, about the Four Lake Authority which appears to be wasting millions of taxpayer dollars. Watch Channel 4′s story here, and read the Tennessee Watchdog piece here.

Justin Owen discusses mass transit

contributor — Tue, 07 Dec 2010 19:04:03 +0000

Recently, Tennessee Center for Policy Research President Justin Owen sat down with the Heartland Institute to discuss the problems with mass transit, including Nashville’s Music City Star. Listen to the entire podcast by clicking here.