Gov. Phil Bredesen is backing legislation that would enable Tennessee to issue $262 million of debt, most of which would be in lieu of using cash to support economic development projects.
Bredesen submitted the legislation as part of a fiscal management package to give the state more flexibility in the current recession. Some measures in the package are designed to assist state workers who may face layoffs and furloughs.
“This legislation has been very carefully crafted to give the state specific tools to manage through this recession in a way that helps minimize the number of potential employee layoffs and frees up state dollars to help us deal with the state budget,” Bredesen said in a release.
Part of the package would give the state more flexibility in how it issues bonds and pays for existing projects. It authorizes the sale of bonds for site preparation and infrastructure improvements for a new Volkswagen facility in Chattanooga, and the Hemlock Semiconductor facility in Montgomery County, which will produce a primary component used in solar panels as well as other energy equipment.
It is estimated that the two projects will create more than 2,500 new jobs, plus other employment in related industries.
Bredesen said the measure would free up $88 million in state funds to deal with the budget crisis. His legislation also allows the state funding board to sell bonds through private placement, if necessary, to deal with the volatile bond market.
The bills are making their way through the Legislature.