States Use Tax Breaks in War for Jobs

May 18, 2011 at 7:00 am

New Jersey is granting Panasonic (PC) a $102.4 million tax credit to move its North American headquarters—nine miles. The incentives, announced on Apr. 20, will help defray the cost of leasing a new high-rise office tower to be built in Newark to replace Panasonic’s digs in Secaucus, which the Japanese electronics maker has outgrown.

The company concedes that its decision to stay in New Jersey, where it employs 800 workers, was swayed by the tax break. Peter Fannon, vice-president of technology policy at Panasonic North America, says the company fielded “quite competitive” offers from Atlanta, San Diego, Los Angeles, and Brooklyn, N.Y., among others. Says Fannon: “We would not be in New Jersey without [this program].” Officials in the town of Secaucus don’t see it as a win for their state, though. “We shouldn’t be using tax dollars to play one municipality off of another,” says town administrator David Drumeler.

State and local governments eager to recover some of the more than 8 million jobs lost during the recession are giving away $70 billion in annual subsidies to companies, according to calculations by Kenneth Thomas, a political scientist at the University of Missouri-St. Louis. States have long relied on fiscal incentives to lure businesses, or keep existing employers from decamping to other locales. Such largesse is coming under renewed scrutiny during this time of strapped budgets. State deficits could reach a combined $112 billion in the fiscal year starting July 1. “The tragic irony of it is that in order to pay for these things, they’re cutting other areas that really are the building blocks of jobs and economic growth,” says Jon Shure, director of state fiscal strategies for the Washington-based Center on Budget and Policy Priorities.  Read more.

M. Niquette, Bloomberg Businessweek, May 4, 2011

Advertisements

Entry filed under: Panasonic, Taxation.

In France, Tupperware Finds a Market Developing countries look to clouds


Travel with the Northern Kentucky Chamber in 2012

Peru - August 12-20, 2012
To learn more about the program, please email Kyle Horseman or call 859.426.3653.

RSS Northern Kentucky Chamber – Calendar

  • An error has occurred; the feed is probably down. Try again later.

%d bloggers like this: