CINCINNATI - Procter & Gamble Co. paid a $34,000 penalty last June for failing to create the number of jobs it promised in a 2010 tax-incentive deal with the state of Ohio.
Attorney General Mike DeWine disclosed the penalty in a November report that listed 51 companies that haven’t met expansion goals in their grants, loans and tax credit deals.
P&G was awarded a 10-year Job Creation Tax Credit deal worth an estimated $6.7 million and a $250,000 grant for a $20 million expansion in Winton Hills in April 2010. The company promised to retain 562 jobs and create 336 new jobs by consolidating employees from 40 locations.
The Attorney General’s report indicates P&G created only 214 jobs.
Tax credits allow companies to offset a percentage of new payroll taxes. If the jobs aren’t created, the value of the tax credit automatically declines. But state officials reduced P&G's tax credit from 10 years to six in 2015. It's now scheduled to expire in December. P&G continues to employ about 2,000 in Winton Hills, but will relocate about 750 of those employees to its downtown headquarters by year end.
P&G spokesman Jeff LeRoy said a “global productivity improvement plan” implemented by P&G after the inventive agreement was finalized caused its job numbers to be lower than originally expected. P&G reduced its global employment by 25,000 in the last six years. Local employment has fallen by more than 15 percent to 10,500.
“We experienced a reduction in enrollment throughout the entire company,” LeRoy said. “We’ve paid all fees due as a result of not meeting the original job creation projections made six years ago.”
Several Cincinnati companies saw their tax breaks reduced in 2016.
Total Quality Logistics LLC had a six-year, 50 percent tax credit reduced to 45 percent for the next three years because it failed to create the 75 jobs it promised in Cleveland. It’s one of six tax-incentive deals that Total Quality Logistics has in various Ohio counties, but the only one in non-compliance. The Clermont County-based company created 66 jobs with a payroll of $2.9 million. The jobs number was 17 percent too low but the payroll number was 10 percent higher than promised.
For Mike Albert Leasing Inc. in Evendale, the reverse was true. It promised 34 jobs with a payroll of $900,000 as part of a $1.3 million expansion in 2011. It delivered 49 new jobs with a payroll of $205,000. State officials ended the tax break in January of last year.
The state reduced the length of three other tax-credit deals -- LEM Products LLC in Butler County, Rhinestal Corp of Mason and 5Me LLC in Clermont County -- because companies fell short of their expansion goals.
But the state took no action against Valued Relationships Inc. in Warren County because it was one of four companies in Ohio deemed to be suffering from “market conditions.” The Franklin-based provider of health monitoring systems promised to create 125 new jobs with a payroll of $3.9 million in 2012. It delivered 104 jobs and $3.4 million in new payroll.