INDIANAPOLIS — An Indiana development corporation led by Gov. Mike Pence has approved $24 million in economic development incentives to 10 companies that sent work to foreign countries, according to a newspaper report Sunday.
The analysis of the Republican vice presidential nominee’s jobs record by the Indianapolis Star (http://indy.st/2bPbALc ) comes as his running mate, Donald Trump, has pledged to penalize companies for shipping jobs overseas.
Since Pence took office in 2013, the Indiana Economic Development Corporation has awarded incentives to companies that offshored production, including to Mexico and China, to cut costs. About $8.7 million in incentives has been paid out so far. In the same time frame, the companies either announced layoffs or fired more than 3,800 Indiana workers.
One of the chief explanations is that job creation and retention requirements for Indiana’s incentive agreements are usually applied to a single site, so workers at the company’s other facilities remain susceptible to offshoring.
An example is handbag maker Vera Bradley, which was approved in 2014 for a $1.75 million, 10-year tax break to assist with a $26.6 million expansion of its headquarters and distribution center in Roanoke, Indiana. The company agreed to keep 567 employees and add 128 more jobs by the end of 2017. However, in 2015, the company closed a design center in New Haven, factories were moved to Asia, and 250 Indiana jobs were lost.
IEDC officials say the company remains in compliance with its incentive agreement.
The state has fought back or held incentives in four cases, returning $746,000 in taxpayer subsidies. But in six other cases the companies haven’t faced consequences.
Pence did not return requests for interviews. His commerce secretary, Victor Smith, defended the state’s economic development record and said 150,000 jobs have been added since Pence became governor. Smith said economic development incentives are “performance-based,” meaning a company must create jobs to get incentives.
“Unforeseen circumstances can affect business plans, and, in those times, we offer our support and counsel to job creators,” Smith said. “However, if a company chooses to neglect its commitment to the state and to its Hoosier employees, we aggressively seek to claw back any incentives the company has received.”
Still, experts say that Indiana is more vulnerable to offshoring than other states because it is manufacturing heavy and that it could do more.
The executive director of Good Jobs First, a Washington D.C.-based advocacy group that tracks corporate subsidies, said Indiana could make companies meet statewide job requirements instead of specifying a single site.
“It is common sense,” Greg LeRoy told the newspaper. “You really think companies should be allowed to get a big tax break at Plant A and ship jobs overseas at Plant B? Come on.”
Information from: The Indianapolis Star, http://www.indystar.com