2 days ago
Stockard on the Stump: Tennessee tax refund boosts private prison operator
CoreCivic, based in Brentwood, Tennessee, one of the state's biggest donors to lawmakers, scored a recent tax refund from Tennessee. (Photo: John Partipilo)
Tennessee's private-prison operator lost nearly $45 million in state payments over three years for failing to meet contractual requirements, but it's landing a nice windfall as part of the state's business tax cut deal.
Newly-released records show Brentwood-based CoreCivic Inc. and its affiliate CoreCivic TRS LLC & Subs each received refunds of more than $10,000 for three years of tax rebates after lawmakers approved an estimated $1.9 billion franchise and excise tax reduction in 2024.
Because of the wide range for payouts, the public will never be able to find out exactly how much the state returned to CoreCivic or 16,000 other companies, many of them based out of state, that received more than 10 grand each. Lawmakers approved categories of less than $750 for the list, between $750 and $10,000 and more than $10,000.
CoreCivic is one of the state's biggest donors to lawmakers' biggest donors, as well, even though we know that legislators don't base their decisions on campaign contributions. At least that's what they tell us.
Tennessee levied $44.78 million in penalties against private prison operator in three years
Release of the lists in the past week has spurred a bit of debate about whether it is transparent enough, especially since it doesn't specify exact amounts refunded and will be up on the state's website for only 30 days.
Aside from that argument and discussion about whether this tax break was a giveaway to make the rich richer, it shows that numerous business entities got what some might call the old double dip.
Take, for instance, SmileDirectClub. The company landed a $300,000 grant from the state in 2017, then hit it big with $10 million from Tennessee in 2019 and the blessing of Gov. Bill Lee for a Nashville expansion. But the tooth-straightening company hit the skids and filed for bankruptcy in 2023, then closed up shop. Yet even though it's no longer operating, SmileDirect is drawing a refund in excess of $10,000 from the state.
The list is long for companies receiving state grants over the last decade and now tax refunds.
FedEx netted a $10 million grant for a $44 million investment in Shelby County in 2019, and Hankook Tire landed $6 million in 2022 for a $611 million project in Clarksville. And don't forget about Ford Motor Co., which received nearly a billion dollars worth of incentives for BlueOval City in West Tennessee and will draw a refund in excess of $10,000 under the new scheme (I mean law). Production at the electric truck plant is running more than a year behind schedule mainly because of concerns about the EV industry.
World's top businesses, Lee Company receive biggest Tennessee tax rebates
The debate centers on whether this stuff is creating a business-friendlier state, putting Tennessee in the midst of economic recruiting wars or simply donating to corporate welfare.
The conservative Beacon Center puts out an annual Pork Report declaring the state's biggest winners of government largesse. In December, it asked people to weigh in last year on three finalists: Memphis Area Transit Authority spending tens of millions on Grizzlies suites and a downtown office; Lebanon City Council approval of a $1.5 million for an unnamed restaurant; and the $2.3 billion from state and local taxpayers for a new Titans stadium at the same time $80,000 is going toward the old stadium.
Axing of the franchise tax on business property didn't make the cut. But if that's not a giveaway, what is? After all, these companies knew the rules when they started, and a letter to the state by businesses challenging the constitutionality of the franchise tax on property could be considered a form of extortion.
One lawmaker said this week if you consider the money as belonging to the businesses and then being turned over to the government in the form of taxes, then it's not a giveaway. That begs the question, though, what about the sales taxes millions of people pay every time they buy a package of bacon? Where's the love for the little people?
To which some might say, 'What's love got to do with it?'
Former Tennessee Education Commissioner Penny Schwinn failed to list a new company called New Horizon BluePrint Group on her federal disclosure form, then dissolved it shortly before the U.S. Senate took up the confirmation hearing for her appointment as deputy secretary of the U.S. Department of Education.
Records show she started the business, a Florida LLC, with Donald Fennoy, former director of the Palm Beach County School District in Florida, in February, after President Donald Trump nominated her for the post. Schwinn's sister took over the company in late March, before it was dissolved, raising questions about the timing.
Typically, folks don't start businesses after they've been nominated for federal jobs, and they don't forget to put them on their conflict of interest disclosure form either.
The74, an online education publication, reported the failure to disclose the business – which never really came to fruition – might cause Schwinn problems in her Thursday hearing.
Former Tennessee education leader promises feds she will cut conflicts
But that would be the least of her problems, if the Senate looks at her history and not just her work resume.
She spent most of her time Thursday bragging about gains Tennessee students made during her tenure. But Schwinn had some hiccups too during her time here working for Gov. Bill Lee.
The Tennessee Department of Education signed an $8 million contract in 2021 with TNTP, a teacher training company that employed her husband. She had to sign an ethics agreement promising not to discuss TNTP stuff with him.
Lawmakers also passed legislation removing the education commissioner from the textbook approval process because they felt Schwinn was directing business to favored companies. In addition, the Education Department saw an exodus of experienced people during her tenure.
This list could continue.
Not that anyone in Washington, D.C. cares much about conflicts of interest or questionable business dealings. Those are status quo. But at some point, the public will rebel against this type of corruption and put someone else in charge of lining pockets.
Chip Saltsman sparked speculation about the political future of House Speaker Cameron Sexton this week when he posted a photo of a Crossville video shoot and said people should 'stay tuned' for a 'big announcement coming.'
Does this mean Sexton is leaving Nashville and moving back home to Cumberland County? It's possible.
More than likely, Sexton will be announcing his intentions to run for Congress to replace U.S. Rep. John Rose, who is running for governor.
The Lookout asked Sexton more than a year ago if he was considering a run for the District 6 seat. His response was that Rose held the post. At that press conference, other House Republican leaders laughed and wondered why they weren't being asked the same question. Probably because nobody cares?
Recently, though, state Rep. Johnny Garrett of Goodlettsville said he was considering seeking the District 6 seat. We haven't heard much about it since then. Come to think of it, we haven't seen much out of Rose, either, since the bitterly cold day he announced he was running for governor.
Whatever the case, we'll be staying up nights to monitor X (formerly Twitter) to see Sexton's forthcoming pronouncement. It could cause a bigger ripple effect than the time the Mississippi ran backwards.
'Take me to the river, drop me in the water / Washing me down, washing me down.' *
*'Take Me to the River,' Talking Heads
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