Intel lured by $2 billion subsidy
The microchip subsidy game is getting more and more costly for taxpayers.
Multiple media outlets reported this week that it cost the state of Ohio more than $2 billion worth of incentives to convince tech-giant Intel Corp. to invest $20 billion in the construction of two chip-making plants just outside of Columbus.
The subsidy package for what’s been described as the largest single private-sector company investment in Ohio history reportedly involves $1.2 billion in cash incentives, including a direct cash grant to the company valued at $600 million. Economic development officials in Ohio described the $600 million as an “onshoring grant” that would be used to help offset Intel’s construction costs, which officials suggested would be 20 percent to 30 percent higher in the United States than Asia.
In addition, Ohio has reportedly agreed to cover $691 million in infrastructure costs for the project and provide Intel with $650 million in job-creation tax credits over a 30-year period.
Local property tax abatements and $150 million in economic development and workforce grants from JobsOhio, the state’s development agency, will push the incentive package over the $2 billion mark.
Intel’s new Ohio plants will be built on 1,000 acres in New Albany, 15 miles northeast of Columbus. The factories are expected to create about 7,000 construction jobs and employ 3,000 workers when they open in 2025. Intel officials have said the project would be part of a larger $100 billion investment aimed at creating the largest chip-making complex in the world.
Investigative Post first reported in January that another tech giant, Samsung, turned down a subsidy offer worth $1.9 billion to locate a plant in Genesee County. The company instead opted to build a chip manufacturing facility in Taylor, Texas, just outside Austin.
That deal, had it been accepted, would have been the second largest incentive package in New York history and among the largest in the country. It was pitched as part of an ongoing effort to bring a large commercial tenant to the Science, Technology and Advanced Manufacturing Park, a 1,250-acre industrial site located in the Town of Alabama.