TENNESSEE | #4 | DRIVEN BY AUTOMOTIVE DEVELOPMENT
Tennessee’s automotive-focused economic development efforts continue to pay off. Nissan announced in March that it was expanding its Smyrna operations to the tune of 1,000 jobs. In June, Volkswagen announced a $700 million expansion plan for its Chattanooga operations that would add as many as 10,000 jobs next year. Tennessee has also attracted a number of major investments from tire manufacturers like Bridgestone and auto suppliers.
Overall, non-farm employment in the Volunteer State is expected to grow by 2.2 percent this year, according to the University of Tennessee’s Center for Business and Economic Research. The state’s new policy of providing free community college educations to all high school graduates pleases Ginovus’s Gigerich. He also gives thumbs-up to their recent efforts to streamline and align state agencies to provide better service.
The Tax Foundation ranks Tennessee’s tax burden 6th lowest and ranks its business tax climate 15th. Tennessee spends more than $1.58 billion per year on incentive programs.
VIRGINIA | #6 | INCENTING IMPROVEMENT
Virginia reached its pre-Recession employment peak late last year, with most job gains coming from education and heath services. Professional and business services, a key cluster, shrunk last fiscal year, reflecting contraction in defense spending. In general, the state’s dependence on government spending darkens the economic horizon. High-tech jobs, an economic driver nationally, shrunk by .8 percent last year, in contrast to the national 8.2 percent growth rate. Overall this year, jobs will grow a projected .6 percent, far behind the national 1.7 percent rate, according to the Bureau of Labor Statistics.
Anticipating the future, the commonwealth has tweaked its incentive programs over the past couple of years to include more funding for job training and programs that reimburse companies for internal training programs, as well as increased job creation tax credits, says Ginovus’ Gigerich. The moves will further strengthen a work force whose quality “is very high,” says Gigerich, reflecting the sizeable presence of senior-level military personnel and top corporate executives. “From the human capital viewpoint they are very well positioned,” he says.
The Tax Foundation ranks Virginia’s tax burden 21st lowest and its business tax climate 27th. Virginia spends over $1.3 billion per year on incentive programs.