Saturday, March 06, 2010

March 6, 2010 Chancellor Says State TNInvestco Records Can Remain Sealed For Five Years

Nashville Chancellor Russell Perkins has sided with the State of Tennessee's request to keep certain  economic and community development documents away from citizen scrutiny. Perkins recently ruled that Tennessee officials don’t have to disclose the documents that would show how six firms were scored and selected to participate in the $120 million Tennessee Small Business Investment Company Credit Act. Perkins' ruling does not kept the records permanently from the public. The state has five years to release the details. A good discussion and access to court filings is here.  The Tennessean article is here.

In keeping the records out of the public domain, Perkins labeled as "sensitive" those TNInvestco records kept by Matthew Kisber, state commissioner of Economic and Community Development, and Reagan Farr, commissioner of the Department of Revenue. See my previous blog post. The records request was filed by Larry Coleman, a businessman who wanted to see how Tennessee officials scored and selected six companies to participate in the TNInvestco program.  Coleman's firm was not selected.

Coleman vowed to appeal the ruling. “The more light we can shine on this process, the better off we’re going to be as taxpayers,” he said.

After the ruling, Kisber commented: "We fully understand the need for open government, and we are committed to upholding that principle while balancing the need of our state to maintain a competitive posture, as we seek to attract new investment and create jobs for the people of Tennessee.”

The TNInvestco program was passed last year as a way to promote economic development. The program allowed the state to sell $120 million worth of tax credits to six investments firms at a discounted rate of $84 million.  Each of the six winners was eligible for the $20 million of tax credits in order to invest in startup and mid-stage companies. The stated purpose is for TNInvestco to spur economic development and create jobs.

State officials have hailed the program as a way to bring jobs to Tennessee. Critics of similar programs in other states have claimed that they wind up enriching the venture capital funds while creating few jobs.

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