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KNOXVILLE — A University of Tennessee program that helps small businesses returned $2.33 in sales tax revenues for every $1 the state invested, a recent audit shows.

UT’s Tennessee Manufacturing Extension Program provided management and consulting services that created or retained 539 jobs in Tennessee and generated $3.5 million in state and local sales tax, said T.C. Parsons, executive director of UT’s Center for Industrial Services.

“TMEP cost the State approximately $1.5 million from January 1997 to July 1998,” said Parsons, “but it generated $3.5 million in tax revenue. Where else can you get a 233-percent return on your money in 18 months?”

The figures are from an independent economic impact study done by the U.S. Department of Commerce’s National Institute of Standards and Technology, which also funds TMEP. The study covers 523 projects undertaken during an 18-month period ending in July 1998.

The audit found Tennessee-s manufacturing extension program is one of the most successful in the nation, often leading the 75 other NIST extension programs in economic impacts and client satisfaction, Parsons said.

Clients of TMEP reported direct benefits of $28.9 million and employment growth totaling 539 jobs. Parsons said the sales tax calculations were the product of a national macroeconomic model.

“These statistics are concrete evidence of the value UT’s outreach programs return to the state,” said Sammie Lynn Puett, UT vice president for public service, continuing education and university relations. “If all state appropriations produced this same return, we would not have a state budget problem.”

TMEP is one of six programs sponsored by Center for Industrial Services, a publicly-funded agency that helps Tennessee businesses use lean manufacturing techniques and new technologies to stay competitive, Parsons said.

Another CIS program, the Procurement Technical Assistance Program, helped clients win $172 million in contracts with federal, state and local governments.

Bob Matheny, program head, said PTAP uses a software program to search databases for government contracts that a CIS client might bid on and then notifies the client by e-mail.

“If clients want to bid, we tell them how to get the bid package, and then we spend time helping them put the bid package together — all at no charge,” Matheny said.

The 12-year-old program has helped Tennessee move from 43rd in total government contracts in 1986 to 12th last year, he said.

Using Department of Defense statistics, he estimated that the $172 million resulted in the creation or retention of 4,047 jobs in Tennessee in 1999. The assistance program generated $573 for every dollar the state invested in it, he said.