Tax Incentives Cause Layoffs

Just as much as they "create jobs." Which is not at all. But can it really be a coincidence that this same scenario plays out over and over again in state after state?

From the Herald:

In May, after the world learned that U.S. military Special Forces had found and killed Osama bin Laden in Pakistan, workers at Bluegrass Station in Lexington celebrated.

"Many folks contributed to the success of this strategic mission in addition to those who carried it out," Howard Yellen, a Lockheed Martin vice president, wrote in a monthly newsletter. "Some included our colleagues in SOF CLSS!"

Yellen would know: His job since October has been to head SOF CLSS, or Special Operations Forces Contractor Logistics Support Services, at the Lexington facility, where Lockheed is doing work that is part of a 10-year, $5 billion contract awarded last year to modify a variety of equipment for Special Forces.

The contract, along with Lockheed's promise to invest $26 million in Bluegrass Station, convinced Kentucky economic development officials to approve $15 million in potential tax credits and $415,000 in other incentives on the promise of 224 more jobs at the facility.

But now, three months later, hundreds of workers at Bluegrass Station have learned they might be let go at the end of September.

Lockheed Martin says it has decided to in-source work that was being done by DS2, a subcontractor that it co-owned but now has divested itself of, according to Lockheed spokesman Ken Ross. Bringing the jobs in-house will save money for Lockheed customers, the company says.

As of Monday, Lockheed Martin said 499 workers have been affected by the change but as many as 422 might be hired back. At least 77 will be laid off, but that number could rise because workers will be competing against outsiders for the jobs.

Liberals know that tax incentives for businesses are a suckers's game. Businesses open, relocate, add jobs, layoff employees and close for practical economic reasons - customer base, stable/educated workforce and strong infrastructure - that have nothing to do with tax incentives. If a state is stupid enough to hand tax incentives to a company the company is smart enough to take them, but don't think such incentives influence any company decisions.