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Indiana Overseas Business Incentives Under Pence Counters Trump's Jobs Deal

SCOTT SIMON, HOST:

President-elect Trump made good on a campaign promise this week. He struck a deal with Carrier Corporation to keep over a thousand jobs in Indiana in exchange for $5 million in tax credits for the company over the next 10 years. First the deal has to be approved by the Indiana Economic Development Corporation, but that approval is expected. Trump's vice president-elect, Indiana's governor, Mike Pence, is chairman of that board. The Indy Star newspaper in Indianapolis investigated the Indiana Economic Development Corporation and found that under Governor Pence, $24 million in economic incentives were given to 10 Indiana companies that then sent work overseas. Investigative reporter Tony Cook is with Indy Star, and he joins us from Indianapolis. Thanks so much for being with us.

TONY COOK: Thanks for having me.

SIMON: Isn't that kind of the opposite of what Trump is trying to do with the Carrier deal?

COOK: That's right, and that's why we started looking into this in the first place. And what we found is that rather than punishing companies that move jobs out of the country, as Trump has consistently said he would do on the campaign trail, here in Indiana, under Governor Mike Pence, the state actually had awarded incentives to at least 10 companies that sent work to foreign countries, reducing the workforce here in Indiana. And in the cases that we found, most of these companies moved work out of the country after receiving these incentives. And in some cases, the state was able to claw these incentives back. In other cases, they weren't.

SIMON: So the money was paid back in at least a few instances.

COOK: That's right, and, actually, Carrier was one of those cases.

SIMON: Well, how was the deal with Carrier that was announced this week different than what kind of incentives they were receiving from the state of Indiana to begin with?

COOK: Well, it's a heck of a lot more. So the total incentive package, when you include some training grants and other things like that, is $7 million over 10 years that they're being offered now. What critics are complaining about is that it appears from a certain perspective that the state is essentially rewarding Carrier, even as it ships some of the jobs to Mexico anyway. From another perspective, they're retaining, you know, a thousand jobs at least. And those jobs do produce revenue for the state through state income taxes and sales tax, and the state would argue that it - and Mike Pence would argue - that they come out ahead still on that.

SIMON: I'm wondering if that doesn't make sense to you, given the fact that if those employers just left the state, there'd be no tax revenue for the state of Indiana to tap, and even more people losing jobs.

COOK: This is the gray area of economic development. You know, how many of these workers would find other jobs in this state? And in terms of these incentives, you know, these don't even appear to be the primary factor in Carrier's decision to keep these jobs here.

SIMON: Is it felt that the most persuasive argument was the fact that United Technologies, which is the parent company of Carrier is a federal contractor and needs to have good relations with the federal government, which Mr. Trump's about to head?

COOK: Absolutely. I think that's part of it. Economic development officials here in Indiana have even acknowledged that they think that is the primary reason for Carrier's decision. You also have to take into account the fact that Carrier may now have a voice at the table when the Trump administration is making decisions about regulatory and tax policy or energy policy, all of which United Technologies, the parent company, and Carrier care deeply about and could have a big impact on their bottom line going forward.

SIMON: Tony Cook of Indy Star, thanks so much for being with us.

COOK: Thank you so much for having me. Transcript provided by NPR, Copyright NPR.