Indianapolis Mayor Joe Hogsett vows to retrieve tax incentive money from Rexnord, the Indy-based manufacturer that plans to move to Mexico.
The city granted $380,000 in tax incentives to bearings manufacturer Rexnord through an agreement signed in 2009 – that’s money Rexnord doesn’t have to pay on property taxes. But after the company announced plans last month to move about 290 jobs from a west side plant to Mexico, Mayor Hogsett is pushing to get that money back.
Jerry Conover, director of the Indiana Business Research Center at Indiana University, says cities often sweeten deals with companies interested in buying property, especially when a plot of land has sat empty for a long time.
“It’s very common for them to work up an agreement that says ‘If you give us X dollars’ worth of tax abatements, or other kinds of financial incentives, we’ll go ahead and occupy that place and employ a bunch of people,’” Conover says.
He says loopholes in those agreements can lead to disputes over incentive funds.
President-elect Donald Trump made a point in his campaign to say he would fight the outsourcing of manufacturing jobs, regularly citing another Indiana company, Carrier, which announced it would ship 1,400 jobs to Mexico. But Conover says it will prove difficult, even for the Federal Government, to convince profit-driven companies not to chase after low-wage workers.
A public hearing before the Metropolitan Development Commission will be scheduled in the coming weeks, where the commission will hear testimony and consider whether it will seek the repayment.