As Tax Breaks for Pfizer End, Jobs Disappear
As Pfizer (PFE) reorganizes after its merger with Wyeth, municipalities are finding that the tax deals they once struck to keep the drug giant in town are having short-term advantages at best and, at worst, no effect at all. Pfizer must make 19,500 layoffs across its empire to make the merger work.
In St. Louis, Pfizer is cutting 600 of 1,000 jobs. The company had been given $2 million in tax breaks to retrain 1,000 workers, plus $2.5 million in “Quality Jobs” subsidies, as part of a 10-year of tax abatement. StlToday.com:
St. Louis County officials are considering canceling the remainder of $6.7 million in property tax abatement to Pfizer.
… Ed Bryant, a spokesman for Pfizer, said the company “would fully meet its legal obligations.”
It looks like St. Louis will cancel the remainder of that abatement:
“They have clearly not lived up to the 1,000-job commitment they made,” [Dennis Coleman, president and chief executive officer of the St. Louis County Economic Council,] said. “This is something we take very seriously.”
New London, Conn., discovered something similar. Despite a 10-year tax abatement for its site there, Pfizer is abandoning its plans for a vast new campus just as the break comes to an end. The Boston Globe:
Pfizer got a sweetheart deal from New London eight years ago, paying taxes on only 20 percent of its property’s assessed value, which came out to $1.2 million a year. But with the tax bill jumping to $6.1 million in 2012, and with Pfizer consolidating operations as a result of its acquisition of the pharmaceutical company Wyeth, the drug manufacturer decided to abandon its 750,000-square-foot complex in New London.
Pfizer also asked Kalamazoo, Mich., for a tax break earlier this year. The company will lay off 250 people in the town, but keep 3,400 at a manufacturing plant — a deal that has locals breathing a sigh of relief.
Jim Edwards, a former managing editor of Adweek, has covered drug marketing at Brandweek for four years, and is a former Knight-Bagehot fellow at Columbia University's business and journalism schools. Follow him on Twitter or send him an email.
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