Commentary

Commentary: Tennessee’s legislature needs to do the math on incentives

Medicaid expansion would bring billions to state without taxpayer investment

October 11, 2021 5:00 am
Arnoldo Garcia gets help from medical assistant, Jasmin Garcia at the Neighborhood Health clinic in Madison. (Photo: John Partipilo)

Arnoldo Garcia gets help from medical assistant, Jasmin Garcia at the Neighborhood Health clinic in Madison. (Photo: John Partipilo)

We need a special session of the Tennessee State Legislature – one that focuses on math – and we need it now.

I am not opposed to reasonable tax breaks, infrastructure investment, and other incentives by Tennessee taxpayers, to attract the right kind of business and job opportunities to the state Even though I might not get one of those jobs, I understand that I benefit when my community benefits.

At the same time, I implore Gov. Bill Lee, and our Tennessee Legislature not to overlook an economic benefit and job-making decision that would impact not only our economy, but the health and wellbeing of many Tennesseans.

Rev. Matt Steinhauer (Photo: Submitted)
Rev. Matt Steinhauer (Photo: Submitted)

The special session called by Gov. Lee would potentially bring 5,800 new jobs to a new Ford plant near Memphis, and a projected 27,000 more jobs that would be created as an indirect impact.  The cost of the proposed State investment is $5.6 billion dollars. 

Do the math.  That is an investment of  $965,517 per new job —yes, that’s just under $1 million dollars invested per worker — and $207,407 per new indirect job.

We did the same thing about ten years ago to entice Volkswagen to build a plant in Chattanooga. Now there is a track record on which we can look back retrospectively and have a good idea of what kind of return on investment we taxpayers have received.  

According to a 2017 article in The Tennessean, federal, state and local taxpayer-funded incentives equal about $80 million and there are 3,400 workers at the VW plant. Do the math. This amounts to approximately $235,294 per job created at the Chattanooga plant.

Between the Volkswagen plant and the proposed Ford plant these two significant taxpayer funded investments would potentially yield about 9,200 plant jobs, and about 49,000 indirect jobs created.

Incentives for the new Ford plan in West Tennessee amount to more than $965,000 per job created. By taking the Medicaid expansion, Tennessee officials could reap $1.26 billion in federal funding and create new jobs, at no cost to taxpayers.

What if we could create over 18,000 new jobs in the state without any infrastructure upgrades, tax incentives or new employee training investments by the taxpayers?  Would that be worth calling a special session of the legislature?

Tennessee could do this by expanding Medicaid. 

We are one of only a handful of states which has not expanded Medicaid. Many states now have several years of retrospective proof of the value of having taken advantage of this program, which insures people not covered by insurance because they are not offered insurance through their employer, or they are not poor enough to qualify for TennCare.  So far the Tennessee legislature has refused to bring this issue to a vote of the full legislative body.

Under the new American Rescue Plan Act Tennessee would receive an additional $1.26 billion federal funding.  According to an analysis by the Kaiser Family Foundation, the state would be required to spend an additional $360,000 over a two-year span for a  net gain to Tennessee of approximately $900 million.

Do the math. In addition to the health benefit of 300,000 of our neighbors being able to seek medical treatment without worrying about being bankrupted, the economic impact would be $3,000 per person vs. an expenditure of over $200,000 per person for the auto plant incentives.

I hope during the upcoming special session Gov. Lee and the state legislature will look around at the money they are leaving on the table that 38 other states have claimed without a single dollar investment of any kind and finally decide to expand Medicaid for some of Tennessee’s citizens in need.

 

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Rev. Matt Steinhauer
Rev. Matt Steinhauer

Pastor Matt Steinhauer is Assistant to the Bishop and Director of Advocacy for the Southeastern Synod of the Evangelical Lutheran Church in America. He was ordained in 2011 when he was called as Pastor of Faith Lutheran Church in Lebanon, TN, where he continues to serve. He serves as a volunteer chaplain at Vanderbilt Wilson County Hospital and on the Board of Trustees for PEER Place, a day program for adults with intellectual and developmental disabilities. Prior to his work in the church, Pastor Steinhauer spent 20 years in sales, management and training in the supplemental life and health insurance business. Pastor Steinhauer lives in Hendersonville, TN. He and his wife, Leann, have three adult children and four grandchildren.

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