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By Tom Humphrey April 27, 2012

Gov. Haslam says Tennessee led nation in income growth

In a speech to the Carter County Republican Party’s "Reagan Day" gathering, Gov. Bill Haslam hailed the accomplishments of himself and Republicans controlling the state legislature in leading Tennessee to better times.

After repeating some oft-heard declarations about cutting the state budget and "aggressive" pursuit of new jobs by creating a business-friendly environment, he added a new claim to exemplify the results of Republican leadership.

"In Tennessee – personal income is growing faster in Tennessee on average than any other state in the country," the governor said as he concluded his remarks.

We hadn’t heard that and decided to check the veracity. And because the claim was made as he touted his accomplishments, we'll also factor in the extent to which the growth in income was created by the official or their policies.

The Bureau of Economic Analysis (BEA), an arm of the U.S. Department of Commerce, released its latest report on personal income growth on March 28, providing a 50-state list based on 2011 figures.

Here is the first paragraph of the BEA’s news release:

"State personal income rose an average 5.1 percent in 2011 after rising 3.7 percent in 2010, according to estimates released today by the U.S. Bureau of Economic Analysis. State personal income growth ranged from 3.4 percent in Maine to 8.1 percent in North Dakota. Inflation, as measured by the national price index for personal consumption expenditures, increased to 2.5 percent in 2011 from 1.8 percent in 2010."

North Dakota, then, not Tennessee, is deemed No. 1 in the nation.

The tables accompanying the release show Tennessee’s per capita growth in personal income for 2011 was 5.4 percent, increasing from $34,921 to $36,533. That was the 16th highest percentage increase in the nation, which is pretty good, but some distance from the top.

David Smith, spokesman for the governor, said the BEA report was, indeed, the source of his information and noted that there were media reports stating that Tennessee had the highest percentage increase in the Southeast and that the rate "was one of the best in the nation."

He and Alexia Poe, communications director for the Haslam administration, acknowledged the governor had made a mistake. The comment came at the end of a long day that included events in Nashville and Knoxville before making it to Elizabethton for the evening partisan speech. Poe said Haslam "perhaps melded two comments together" – that Tennessee leads in the Southeast and that is one of the highest averages in the nation.

As for being tops in the Southeast, a couple of points may be worth noting to put Tennessee’s standing in perspective. One is that Texas is not considered part of the Southeast. And another -- the Southeast ranked lowest in average personal income among the eight regions listed by the BEA. The top region is New England with an average income of $51,074.

The Southeastern per capita personal income average in 2011 was $37,472 versus the national average of $41,683. And Tennessee’s average income, even after the growth in 2011, is still below the Southeastern average.

In rating states for average personal income, not growth, Tennessee last year was No. 36 in the nation, up one notch from 37th in 2010.

As for credit for the income growth? When we evaluated Haslam’s claim about job growth, we determined it was a stretch to say a governor in his first year in office had much real impact on improved economic numbers, based in part on the evaluation of economists.

Malcolm Getz, a Vanderbilt University economics professor, said it’s also a little premature of Haslam to start claiming or otherwise implying credit for income growth. "Governor Haslam's programs are unlikely to have had any significant effect in 2011," he said. "For the most part, the effect of policy shifts accumulate over several years. The main forces that drive economic growth are out of the control of governors."

One huge "force" is the national economy, and Tennessee’s 5.4 percent growth was just above the national average. So even if this involved a governor who had been in office for several years, it’s clear that Tennessee benefitted from national patterns not directly related to specific state policy.

Our ruling

Even if it was a mistake made at the conclusion of a long day, Haslam told an audience that personal income was growing faster in Tennessee than in any other state -- something that we see on video and that was then reported by a newspaper. In fact, 15 states showed better per capita income growth than Tennessee did, and the state only outpaced the national average by 0.3 percent.

He also, in our determination, is trying to take premature credit for income growth that for the most part occurred before any of his policies had been put into place.

We rule the governor’s claim False.

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Our Sources

Video of the governor’s speech, comment coming at the very end.

Johnson City Press article on the governor’s speech.

U.S. Bureau of Economic Analysis news release on personal income growth in 2011 with accompanying state-by-state tables.

Chattanooga Times-Free Press article, April 14, 2012, "Tennessee income growth fastest in South"

Interview with David Smith, April 23, 2012.

Interview with Alexia Poe, April 24, 2012.

PolitiFact Tennessee ruling of Half True on Haslam’s claim about jobs.

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Gov. Haslam says Tennessee led nation in income growth

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