Dan Horn reports:
General Electric will get a tax break of as much as $130 million from the state in exchange for keeping about 5,000 full-time jobs in southwest Ohio.
The deal with Ohio’s Tax Credit Authority modifies a previous agreement from 2009 between the company and the state that tied the tax credits to jobs at GE Aviation’s Evendale headquarters.
Company officials say they still are committed to retaining those jobs in Evendale, but they said the new deal reflects faster-than-expected expansion of jobs at company facilities elsewhere in the state, including Dayton and West Chester Township.
“There isn’t a plan to reduce anything here,” GE spokesman Rick Kennedy said. “It’s just widening the area for the commitment to jobs.”
The tax credit deal is actually two separate agreements with a total possible value to the company of $130 million in job retention tax credits. One agreement runs for 20 years for up to $2 million per year, while another runs for 15 years and is valued at up to $6 million per year.
Job retention tax credits typically are awarded to companies that are considering moving some or all employees out of state, or as part of a package of tax breaks that includes the promise of hiring additional employees.
The tax credits paid to companies are based on a percentage of state income taxes withheld from employees.
Gov. John Kasich’s office said the jobs GE promised to retain total $140 million in annual payroll. According to the state’s Tax Credit Authority, the company received the credit to help its restructuring plan and to “stabilize General Electric’s presence in Ohio.”
The Department of Development’s report on the deal says the job retention credit is “a major factor in GE’s decision to remain and re-invest in Ohio.”
“Ohio is competing with all of the GE operations worldwide for this investment, with strong competition nationally and internationally,” the report said.
It said the jobs covered by the tax credit include positions in engineering, marketing, information technology, human resources, technical support and others. Kennedy said the revised deal takes into account the continuing expansion and modernization of GE’s Evendale headquarters.
That investment, he said, already has topped the $100 million promised in 2009. “We’ve gone way beyond our original commitment,” Kennedy said.