According to The Chattanoogan.com, the Chattanooga City Council questioned the use of tax incentives in a situation where although there was going to be substantial capital investment, no new jobs were to be created. In an environment where companies looking for new locations, the logic in recommending the incentives is eliminating options a company might have to relocate. That is the logic used by Steve Hiatt of the Chattanooga Chamber of Commerce in his appearance before the council advocating the tax break, and it is increasingly compelling logic.
The company requesting the tax break is Chattanooga Coca-Cola Bottling, and their commitment is to spend $2.5MM on equipment, and $9.0MM on real estate while "retaining" 386 jobs for the six years during which the requested breaks occur. It is unlikely that the company would leave Chattanooga, so the council questions how the tax breaks could be incentives, and if they are not incentives, then why are they offered if the purpose of the tax break is to spur job creation?
On the other hand, the company could move and take their jobs with them. Shouldn't the council offer tax breaks to keep jobs? Should a company be denied tax breaks when the city would offer the similar tax breaks to another soft drink manufacturer bringing the jobs to town in order to compete with Coca Cola? To deny them a tax break would penalize them relative to other companies in the same market.
There are no easy answers. The council is right to worry about setting a precedent for tax breaks without new jobs. And they should listen to the economic development voice warning of companies taking jobs elsewhere, or penalizing those companies, in effect, for already being in Chattanooga.
The council deferred decision for a week. The Parties wish them luck in developing policies for addressing to a complex question in very a short time.
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