A panel on Monday approved a plan to give DuPont $9.6 million over the next five years as part of ongoing efforts to keep pieces of a post DuPont merger with Dow within Delaware’s borders.
State officials have made retaining a DowDuPont footprint in the First State a top priority - offering a package of incentives to land the planned agricultural and specialty products companies
Monday, the Delaware Council on Development Finance voted unanimously to approve the over 9 and a half million dollar Strategic Fund outlay included in that incentive package.
The funds include $6 million to reimburse DowDuPont for up to three percent of capital expenditures -- which aims to encourage the companies to invest in facilities in the state. And the other $3.6 million will be used to support employment efforts.
President of Delaware Financial Group Andy Lubin chairs the council.
“These expenditures will preserve the integrity of retaining a significant number of employees and human capital in the Delaware area," said Lubin.
University of Delaware professor of corporate governance Charles Elson is less optimistic about the effectiveness of incentives like these funds.
“Having to work a side transaction where certain monies are transferred to get you to stay...I think in the long term doesn’t work out and is not a great way to recruit businesses," said Elson.
In other words, he says it’s a little like paying someone to be your friend. And there are other, more sustainable ways to keep and attract businesses to the state.
“People will stay with you if they believe the regime has a reasonable taxation structure, has a good business climate and has a strong workforce--that’s why you move to a particular place," said Elson.
The state is working on other fronts as well. Last Thursday, lawmakers filed a bill to tweak R&D and job creation tax credits that were part of a package. And in mid January, lawmakers passed a bill to lower corporate income taxes to keep big businesses from fleeing the state. State officials says those moves are expected to lure or retain companies beyond DowDuPont.
Additionally, the state is obtaining agreements designed to hold DuPont to certain conditions over the next five years in exchange for the Strategic Fund money. Among them is employing a minimum of 1700 workers in the state.
DowDuPont officials reiterated Monday they expect their merger to take place in the second half of this year.
