Tax Breaks Credited With Creating Jobs
By Paul Tuthill
Springfield, MA – When the government awards tax breaks to companies in exchange for a promise to create jobs, it does not always work out. But a western Massachusetts manufacturing company that is steeped in history says it kept its end of the bargain, and created the jobs it promised for the tax breaks it received. WAMC"s Pioneer Valley Bureau Chief Paul Tuthill reports.
A year ago, Springfield based Smith and Wesson received $6.6 million in combined state and local tax breaks to help finance expansion at its manufacturing complex in the city and to create 225 new jobs over a five year period. Smith and Wesson President and CEO James Debney says the company has kept its end of the bargain. 217 jobs have already been created with ten more expected by the end of February.
Debney said company executives worked quickly with state and local officials last year to come to terms on the deal and cut through red tape with the common goal of creating jobs.
The success at the 160 year old firearms manufacturer is in stark contrast to the state's disastrous attempt to support a start up clean energy company, Evergreen Solar. The company received 58 million dollars in state financing that was to create hundreds of jobs at a solar panel factory. But Evergreen sent most of the jobs to China, and filed for bankruptcy last year.
Smith and Wesson received a six million dollar credit on its state corporate income tax. Michael Vedovelli, the senior regional director for the Massachusetts Office of Business Development says the tax break was made possible through a program to retain manufacturing in the state's Gateway Cities its old industrial cities that are struggling to reinvent themselves.
Smith and Wesson reports it spent 19 million dollars on capital investment in its Springfield plant as it transferred manufacturing of the company's Thompson rifles to there from a plant in New Hampshire. Smith and Wesson received a 600 thousand dollar property tax break from the city of Springfield.
Mayor Domenic Sarno said the local tax break had led to full time jobs with average yearly wages of 47 thousand dollars plus benefits.
Sarno also awarded Smith and Wesson a 100 thousand dollar community development block grant for job training programs for military veterans and vocational high school students. Smith and Wesson hired 27 veterans from the program, including Dennis Paul. Laid off from a telephone technicians job his unemployment benefits were about to run out when Paul learned about the openings at Smith and Wesson.
Smith and Wesson is also working with students from Springfield's Putnam Vocational Technical High School to teach them skills required for precision manufacturing. Employment experts say there will continue to be a demand for workers in the sector where the average age of the workforce is 55.