In the absence of efforts by the states, the U.S. Department of Health and Human Services has stepped up to do the right thing for children.Many politicians claim government can’t create jobs, but that doesn’t stop the politicians from trying to create them – most often with tax incentives granted in exchange for job promises. If the promises aren’t fulfilled, however, companies too often retain the incentives.
But not this time.
Hoosier taxpayers can take some satisfaction in knowing that Whirlpool Corp. must repay the state $800,000 for reneging on its agreement to retain 260 full-time jobs in Evansville after it shut down its refrigerator-manufacturing operation in 2009. The company announced last fall it would consolidate its North American procurement jobs to Benton Harbor, Mich., leaving Evansville with about 230 jobs.
“While we are delighted to have Whirlpool, who has been a part of the local community for more than 50 years, continue to employ associates in Evansville, the current levels do not meet previous commitments,” said Indiana Secretary of Commerce Dan Hasler in a statement. “As per our standard agreements with companies, incentives are conditional upon the hiring and retention of Hoosier employees.”
The difference in employment numbers is slight – only 30 jobs – but the state’s position sends a clear message that companies must hold to their agreements.
Whirlpool Corp. has agreed to repay tax credits and incentives. They were part of a $1.1 million package the Indiana Economic Development Corp. awarded the company in 2004. The state allowed Whirlpool to retain the credits after it shuttered its Evansville operations and moved 1,100 jobs to Mexico because Whirlpool officials promised they would retain the 260 jobs at a product development center in Evansville.
The IEDC announcement is refreshing news. While Hasler said the department actively seeks to reclaim tax credits granted for unfulfilled agreements, he acknowledged that the state has pursued only $12 million in conditional tax credits since 1994.
State incentives are sometimes just part of the package companies receive when they locate or expand in a community. Local officials often throw in their own county’s tax incentives, a point some candidates for Allen County Council have been making this year. They are asking about the accountability for abatements if the jobs never materialize. Why isn’t there more transparency in tracking performance?
But as the state’s tough response in the Whirlpool case shows, companies can be held accountable – and those broken promises can at least yield returned tax dollars.
