Nashville to require more transparency from businesses seeking city incentives
- Under Nashville's new ordinance that supporters have dubbed the "Do Better" bill, businesses will have to be more transparent about their economic development plans if they wish to receive incentives from the city.
- Businesses will have to disclose information such as how many jobs will be created during and after construction, how many county residents they will hire and estimated worker wages. They'll also have to disclose workplace details such as any federal or state safety violations and wage- or employment-related legal action.
- Businesses that go through the process and receive incentives will have to submit a quarterly report to the city and an annual report to the metropolitan council showing compliance with the agreement. The council can suspend incentives for a business that fails to prove compliance or fails to submit a report.
The use of municipal incentives has been a contentious practice for some time, and it's received more attention in recent years as the practice is more widely used and talked about. Amazon's HQ2 announcement also brought more exposure to the practice when cities piled on millions of dollars of hefty, creative and sometimes questionable incentives in an attempt to lure the mega-retailer. A number of cities have shrouded their HQ2 incentive proposals in secrecy, even after they submitted their plans to Amazon, which has renewed calls from the public and community advocates for greater transparency and putting citizens above corporations.
Many community groups expressed support for this measure, which offers greater protections against big companies that would disrupt residents' lives and negatively shape the city's landscape and social fabric. Beyond social issues, it provides better safeguards for taxpayer dollars and brings attention to whether citizens' money is being spent in a way that benefits them. The language in the ordinance reads that the transparency will enable city leaders to "determine whether the public interest is served by the incentive under consideration." Requiring quarterly and annual check-ins furthers the business' responsibility and commitment to the community and eliminates a "one and done" assessment when an incentive is awarded.
Not everybody is happy with the ordinance, though. The Nashville Area Chamber of Commerce was vocal in its opposition and says the measure could push companies to choose more amenable cities over Nashville. The chamber supports greater transparency, but it suggested that the council strike a better balance to avoid driving away business. The chamber's main concern is a requirement for businesses to go before the metropolitan council annually, which it says discourages businesses from taking incentives because "this inserts an elected body into contract compliance review."
Incentives are a sticky issue and it's tough to please people on all sides. While some consider Nashville's ordinance too harsh and invasive, others believe it's a step in the right direction toward improving how the government serves its citizens. It would not be unusual to see other municipalities follow suit in the coming months.
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