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State Spends $200 Million On Controversial Investment Program -- Sky Arnold
Updated: Tuesday, November 19 2013, 08:54 PM CST
Former teacher Matt Rubinstein started LiveSchool to create software that teachers could use to keep track of their students without filling out cumbersome paperwork.
That software allows teachers to record student behavior in their iPads and then share that info in real time with other teachers in the school.
"So any teacher in the building can pull up a student's history for the day and say jeeze this student is having a tough morning," said Rubinstein.
LiveSchool is operating in more than 80 schools and growing partially because of you.
The Nashville business is one of more than 100 companies that received state money from TNInvestco.
It's a program that was signed into law in 2008 by Governor Phil Bredesen to help bring money to new and start up businesses.
Those businesses have received as little as $6,000 to more than a million dollars.
State Senator Doug Overby helped pass the program because he felt businesses needed options during a time when it was hard for many to get capital here.
"Most jobs created in Tennessee are created by small and start up businesses," said Overby. "They were moving to California they were going to Silicon Valley."
That's where TNInvestco came in.
Under the program the state gave money that was generated through tax abatements to investment firms like Nashville Capital Network to in turn invest in companies.
Eventually $200 million worth of tax money will be used in the program.
"If these companies become the global type companies we hope they will they will employ tons of people for years to come in Tennessee," said Nashville Capital Network's Sid Chambless.
Three years in the program has had some failures.
Tennessee spent $440,000 on 15 companies that are no longer in existence.
The $90 million total investment so far has created just 1400 jobs.
That's more than $66,000 a job.
It's one reason Justin Owen's organization the Beacon Center put TNInvestco on its annual pork report.
"This is the type of lackluster performance that only the government can accomplish. When the government tries to pick winners and losers they often do a very poor job," said Owen.
Fox 17 asked Senator Overby about those job numbers and he believes taxpayers should look at this money as an investment.
If LiveSchool because a hit, for example, under TNInvestco Tennessee will see the same financial return as other investors.
"We didn't spend the money we made an investment in an enterprise. Let's face it new and start ups don't employ 500 people at a time," said Overby.
Overby believes the gamble will all pay off if one business hits it big.