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A Times Editorial

Taxpayers on hook for unkept promises

The state, Pinellas County and the city of Oldsmar paid millions of dollars in incentives to persuade the Nielsen Co. to locate in Oldsmar and create hundreds of new, high-wage jobs. Now that investment is turning sour as Nielsen, a media and marketing research company, outsources many of those jobs to a company in India and lays off its local workers.

The company defends its right to continue such "restructuring" to position itself efficiently and competitively in the marketplace. Here's a right that the state, city and county should claim: Demand their money back.

Nielsen is not the first company to grab a package of public incentives in exchange for the promise of local jobs and then violate the spirit of the arrangement. The St. Petersburg Times has reported extensively on companies that received tax refunds, grants, loans, fee waivers and other incentives from government and the taxpayers, sometimes for decades, only to eliminate or never create the promised number of jobs or to fill them with low-wage workers.

It is not clear whether Nielsen ever delivered the 1,883 jobs the state says the company promised it would maintain in Oldsmar when it moved there from another Pinellas city, Dunedin, in 2003. But on the strength of its promise to stay in Pinellas and add 600 new high-paying jobs to its existing work force of more than 1,200, Nielsen entered the state's Qualified Target Industry tax refund program as well as a county incentive program created to keep companies from leaving Pinellas. The state, city and county agreed to rebate some state and local taxes each year and provide certain other financial incentives. The payoff for Nielsen has amounted to more than $3-million so far.

All seemed rosy until rumors began circulating that Nielsen employees were losing their jobs. Oldsmar residents also noticed that new people were occupying local apartments and gathered at bus stops in the mornings. They are employees of Tata Consultancy Services in India, brought to Oldsmar on special visas to be trained in the work that Nielsen does. Nielsen staffers who agree to "transfer their knowledge," as a company rep puts it, to their replacements get extra severance pay but will still end up on the unemployment line.

Taxpayers stand to lose at least three ways. They lose the value they expected to gain from the incentives. They must help support laid off workers until they get another job and health insurance. And unless the workers from India are getting adequate wages and health insurance while they are in America, taxpayers could be on the hook to help them, too.

That's not the deal the taxpayers made with Nielsen, a company that is trying to change the rules after the game began.

Taxpayers on hook for unkept promises 04/24/08 [Last modified: Friday, May 2, 2008 9:48pm]
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