Tennessee taxpayers are about to spend millions on a Starbucks order they didn’t ask for. In April, the world’s largest coffee chain announced it would be opening a Southeast corporate office in Music City. The state has done well in attracting businesses, both large and small, through a low-tax, business-friendly environment. Yet those bigger businesses sometimes get a free upgrade, courtesy of state taxpayers, and the Starbucks move is brewing up to be a burn for Tennesseans.
Despite the coffee chain’s public and vocal decision to open an office in Tennessee, state leaders act as if Starbucks needs more convincing or as if its profits aren’t “grande” enough to cover office space. On May 20, the State Funding Board will debate whether to offer $30 million in tax incentives. Not to be outdone, Nashville’s mayor wants to add a “double shot” of incentives, with the city potentially adding to the subsidy coffee pot. Nashvillians are likely steaming with the news after being dealt a massive property tax increase just months earlier. While residents and independent businesses–more than 300 of which have said that their property taxes are now untenable–tighten their belts, city leaders are looking to loosen the strings of the public purse.
While we welcome Starbucks to the state, attracted by our economic climate, Tennessee taxpayers should not be venture capitalists for Fortune 500 companies. Small businesses and entrepreneurs should not see profits from their daily grind used to financially support a multibillion-dollar corporation. The state should wake up and smell the coffee, and end the history of picking winners and losers through corporate welfare deals. With cost-of-living increases and local tax hikes, Tennesseans are getting roasted by all levels of government. The $30 million in taxpayer dollars could fund lavish corporate office space for one of the world’s largest companies, or it could be used to repave up to 500 miles of Tennessee roads, or hire troopers and emergency personnel for scalding coffee burns (instead of funding fake ones on TV). A latte can fuel you during that eight-hour drive, but you’d be hard-pressed to find someone who prefers coffee over smoother roads.