Arkansas Will Claw Back Hewlett-Packard Subsidies

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Photo and the caption by Arkansas.gov: “Governor Beebe today [Mar 3, 2010] helped dedicate the HP Conway facility. HP expects to employ 1,200 Arkansans at the new facility.”

After laying off 500 workers from its publicly subsidized facility in Conway, Hewlett-Packard will have to repay some of the money it has received from the state, Arkansas economic development officials announced.

When HP opened its customer support facility in 2010 (the deal was announced in 2008), it was supposed to be a game changer for the economic development reputation of Arkansas. The state was willing to pay the price and offered HP state and local subsidies.

Arkansas never disclosed the full value of the subsidy package, but it was reported that the company received at least $17 million upfront: $10 million from the state’s Quick-Action Closing Fund and $7.2 million from city of Conway, including $5 million the city spent to upgrade the industrial park where the facility was later located.

HP was also eligible for various performance-based tax refunds, rebates and credits. Although Arkansas does not publish data on its subsidies, the state made some of that information available to Good Jobs First. The data, now available through Subsidy Tracker, includes: three awards from the Existing Workforce Training Program for a total of $62,882; an income tax credit from the Advantage Arkansas program worth $53,418; and a refund of $21,801 from the Tax Back Sales and Use Tax Refunds program.

After the layoff, the state officials announced that HP no longer met the minimum requirement of 1,000 jobs at the Conway faculty and that the state would work with the company to determine how much money needs to be returned. It is unclear, however, whether the clawback will include only upfront grants or also already claimed tax and workforce training subsidies, and whether HP will have to return any local funds.

Although HP’s layoffs are not good news, it is encouraging that Arkansas is willing to implement the clawback provisions it wisely included in its deal with the company.

One Response to “Arkansas Will Claw Back Hewlett-Packard Subsidies”

  1. Bubba Says:

    There is a company in England Arkansas called England Oilfield Services that took similar subsidies with the promise of bringing over 175 jobs to the area that has never had more than 20 employees at one time. That was almost 6 years ago I wonder why they aren’t having to pay back their subsidies.

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