Diebold’s international HQ’s is presently located in Green, Ohio near Canton—a region where the company started some one-hundred and fifty-two years ago. It’s been at its present location since 1972. While Kasich dithers on making any decision on the casinos, thus delaying billions in construction and new jobs, he’s rushing to declare victory over keeping Diebold in Ohio.
Today the Cleveland Plain Dealer reports that Governor Kasich and Diebold will announce that the State is giving $55 million (what budget deficit?) in tax incentives to essentially finance Diebold’s planned new $100 million world headquarters (the company wants to build a corporate campus as opposed to their current arrangement.)
The current facility employs 1,900 at its sites in Stark and Summit counties. What does Diebold get and promise in return, according to the Plain Dealer?
Pending approval by state and local governments, Diebold’s total incentive package could end up around $100 million, the company says. State officials declined to comment on the specifics in that package.
In return, the company would agree to employ about 1,500 people in Ohio for 18 years.
In other words, Diebold could layoff 400 employees in the next 18 years and still keep the State and local incentives. The State, alone, is paying $55 million, more than half the estimated costs of the project, in return for a promise that the company won’t lay off more than 400 employees in the next eighteen years. Local incentives cover the rest of the costs. We’re not even paying to keep jobs, just mitigate how much we’re willing to lose under this deal.
The package relies on the same legislation that was passed this year that made the American Greetings deal possible, HB 58. Governor Kasich will talk about how the company was “planning to move” and even had an incentive package offer from either North Carolina or Virginia. Of course, it’s not like Diebold and other companies wouldn’t learn they need to get such an incentive package in order to qualify for the massive tax savings offered in that bill.
Was Diebold seriously considering leaving Ohio? We know that at least one State gave them a package deal, but American Greetings made the same argument even though they were supposedly thinking of leaving Ohio over a municipal tax they don’t even incur and was considering a State that just enacted a massive tax increase the company would have had to pay. That’s the problem with programs like that created by HB 58. It creates a roadmap in which companies with over 1,000 employees know how they can game the State into giving them massive tax breaks, so long as they can dupe another State in presenting a package to pose as a potential threat.
According to the Plain Dealer, Diebold made over $2.82 BILLION in revenues last year. For the 58th straight year, it increased what its stock pays in dividends, something the company itself touts is an unprecedented act for a company its size. And it’s going to get a world HQ campus of its dreams without having to pay a penny for the construction of it.
And if Kasich’s budget is passed, I believe this means that the construction jobs for this new world HQ will be exempt from paying prevailing wage. And John Kasich is rushing to Canton right now to declare victory over this.
[UPDATE:] I forgot to mention that Governor Kasich’s budget seeks to take the program created in HB 58 and TRIPLE the funding from $8 million to $25 million over the biennium while lowering the number of employees at stake to qualify. In testimony before the House Finance Committee, a representative from the Ohio Department of Development says the funding increase is needed to meet the “demand” for the program.
Gee, I wonder if passing HB 58 increased the “demand”?
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