Chesterton Tribune

 

 

Trump/Pence Carrier deal breaks with state policy by giving tax money to company that is cutting jobs

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INDIANAPOLIS (AP) The $7 million incentive package Carrier Corp. will receive in a deal with President-elect Donald Trump and Vice President-elect Mike Pence is a departure from how tax credits are commonly used in Indiana.

The furnace and air conditioner manufacturer will receive $5 million in tax credits over the next decade in exchange for keeping hundreds of jobs at its Indianapolis plant, the Indianapolis Star reported. It will also get $1 million in training grants and up to $1 million in additional tax credits based on its planned $16 million investment in the factory.

The deal differs from most other economic development agreements in Indiana, where incentives are usually aimed at bringing in jobs, not retaining them. Trump has criticized the use of such incentives in the past.

The deal was an early victory for the incoming administration and was mostly welcomed by the plant's 1,400 employees, who were told in February that their jobs would be dropped as the work moved to Mexico. But the deal will only save about 800 jobs that were initially slated to be outsourced. That means an estimated 400 to 500 workers at the plant, as well as 700 employees at another plant owned by related company in Huntington, Indiana, will still lose their jobs.

Some economic development experts said the agreement is troubling.

"It's a potentially dangerous policy where you reward a company that threatens to leave. ... In this case, you're rewarding a company that is actually cutting a lot of jobs in the state," said Steve Weitzner of site selection firm Silverlode Consulting.

Mitch Roob, who led the state's economic development agency under former Gov. Mitch Daniels, said economic development needs to be handled on a case-by-case basis. He said awarding incentives for retention wasn't common.

"But there were certain circumstances when that became the best option for us, and we went ahead and did it," Roob said.

The board of Indiana's economic development agency must still approve the deal. As governor of Indiana, Pence is chairman of the board and appoints its members.

 

Posted 12/2/2016

 
 
 
 

 

 

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