Tax break for Nielsen fuels anger

Date: Thursday, July 03, 2008 4:11 AM

<<<<< JOB DESTRUCTION NEWSLETTER No. 1884 -- 7/03/2008 >>>>>

The Nielsen Company received some very generous tax rebates from the city of
Oldsmar, Florida and Pinellas County in order to create high paying jobs.
Unfortunately the knuckleheads that designed the incentive program never
stipulated who Nielsen hires or what their citizenship status must be. All
that is required is that Nielsen create high paying jobs in Florida.

Nielsen built a technology center in Oldsmar and hired several hundred
workers, which qualified them for the tax refund. Many of those high paying
jobs didn't last very long because soon after the tax rebate program was
signed into law Nielsen instituted layoffs. The jobs didn't disappear however
-- Nielsen merely outsourced them to India and gave the rest of the jobs to
Indian replacements on H-1B or L-1 visas.

Perhaps because of the controversy that has been brewing over the issue the
Oldsmar City Council announced that they will cancel the jobs subsidy. So far
Nielsen has bagged about $3.6 million and it's not clear how much more money
they will receive. Take for instance Mike Meidel, director of Pinellas County
Economic Development, who explained that even with the layoffs, the company
had hired enough employees to continue to qualify for the tax incentives. It
sounds like if Meidel had his way he would keep the gravy train rolling.

The city and county obviously got snookered by a shell game in which Nielsen
substituted H-1Bs for Floridians. However, that isn't stopping many of the
local politicians from putting a happy face on the situation. Meidel forgets
to mention that the employees he is paying for with taxpayers'
money are Indian nationals that work for Tata.

"The incentive did everything it was intended to do," said Meidel.
"We have more employees here today at higher wages than when the
incentive began."

It would be interesting to see if the unemployed Nielsen employees shared such
high praise of the incentive program, but unfortunately none of them has dared
to go public.

Following the excellent article below are a few excerpts from city and country
documents. Notice that the Oldsmar City Council said that they would invite a
Nielsen representative to explain what is going on during their May 20th
Council meeting. You can read the minutes of the meeting at the following
link:

http://www.ci.oldsmar.fl.us/City_Clerk/clerk.htm

The discussion with Nielsen never took place. Instead there was talk about
planting flowers, art exhibits, and the city library.

To see a picture of the brainchild at Nielsen who made the deal with Tata and
to discover that he was doing the same thing at GE Medical click this
link:

http://www.thehindubusinessline.com/2003/04/03/stories/2003040300470700.htm
TCS, GE Medical set to renew contract

Click this link to find out what he is up to at Nielsen:

http://www.nielsen.com/media/pr_070305.html
Nielsen Names Mitchell Habib Executive Vice President, Global Business
Services

***** INTERESTING COINCIDENCE *****

Thibodeau's article mentioned that Nielsen had to pay its employees $52,000 in
order to qualify for the tax rebates. The $52K number is probably based on a
salary for programmers because all that's really required is that they pay
150% of the prevailing salary for a particular job [see documents below].

I really didn't think Nielsen would be blatant enough to use that number as a
wage floor on their LCAs but they did. Of course it could be just a
coincidence (LOL!).

Here is an example I found for 2006 at http://www.h1b.info/

Computer Software Engineer 1 $52,000/year 10/01/2005 Oldsmar, FL

There are others just over $52K. Of course some are under that number, but it
would still qualify Nielsen for the lower tier tax rebate.

+++++++++++++++++++++++++++++++++++++++++++++++++++

http://www.computerworld.com/action/article.do?command=viewArticleBasic&articleId=9105518

Tax break fuels anger over outsourcing-related layoffs in Fla.

Patrick Thibodeau

July 01, 2008 (Computerworld) Nielsen Co., the media company known for

audience measurement, has given up tens of thousands of dollars in local tax
breaks this year after signing an outsourcing deal with an India-based
offshore provider.

The move, which has drawn negative reviews from local officials, came after
the company announced it would lay off 117 workers at its global technology
center Oldsmar, Fla.

Although companies that hire outsourcing firms often try to limit the release
of information about layoffs through employee nondisclosure agreements tied to
severance and public statements, Nielsen was unable to do so in this case.

That's because it received property tax breaks in 2001 to build a $100 million
global technology center in Oldsmar. The tax breaks were pegged to the number
of high-wage jobs -- those that paid at least $52,000 -- the company created.
That forced Nielsen to disclose hiring details at that facility, effectively
putting the employee count of the facility on the local political radar.

In April, when the layoffs were reported locally, Oldsmar city council members
responded angrily to the move, according to the minutes of one meeting
(download PDF). One council member accused the company, its largest employer,
of "making a joke of the tax incentive program," and another charged that
Nielsen "had abdicated their responsibility as a corporate citizen." Adding
fuel to the fire were local media reports, which publicized the layoffs and
the council's reaction.

Nielsen had about 1,200 workers at the facility when the incentive agreement
was reached, an employee count that gradually grew to 1,700. But last October,
Nielsen announced a 10-year outsourcing agreement valued at
$1.2 billion with Tata Consultancy Services in Mumbai. The move was designed
to allow Nielsen to integrate and centralize IT systems.

That deal was followed this year with the news that 117 employees would be
laid off. Although 50 of those workers have been hired by Tata, Nielsen last
week announced it was cutting anotherr 170 jobs -- and some of those affected
are training Tata employees to do their work. The company expects to have
about 1,300 employees by year end at its facility, with the addition of
another 250 or so contract workers.

Gary Holmes, a spokesman for Nielsen, said the decision to pull out of the
incentive program followed the Oldsmar city council's "second thoughts about
the agreement" and the impact of all the attention on the layoffs.
"It became kind of an emotional issue," Holmes said.

Nielsen's layoffs also drew attention from CNN's Lou Dobbs, who has railed
against the H-1B program. India offshore providers are major users of the H-1B
visa, with Tata getting 797 of the visas in 2007. Opponents cite the visa's
use in outsourcing to counter tech industry claims by Bill Gates and others
that the visa is used to hire "the best and the brightest" foreign graduates
of U.S. universities. Congress is currently struggling to find a middle ground
through legislative efforts to give a Green Card, or permanent residency, to
foreign nationals who receive advanced degrees from U.S. universities.

Under the original 2001 agreements, Nielsen has received some $3.1 million in
tax incentives for its Oldsmar facility, which includes $1.7 million in breaks
from the state and $1.4 million from Oldsmar and Pinellas county.
The local incentives run to 2016 and will depend on how many high-paying jobs
remain in place during each year of the agreement.

Holmes said Tata is helping the company move away from proprietary systems
toward an infrastructure that integrates a variety of reports and data on one
platform. No additional layoffs are planned this year, he said.

Whether the issue of tax incentives is a closed matter, remains to be seen.
After being asked about the issue, Oldsmar Mayor Jim Ronecker said in an e-
mail that there are "continuing discussions' with Nielsen. He declined further
comment.

Despite the recent layoffs, local officials said the incentive program had
done its job. Nielsen could have built its technology center somewhere else,
said Mike Meidel, director of Pinellas County Economic Development.
And even with the layoffs, the company had hired enough employees to continue
to qualify for the tax incentives.

"The incentive did everything it was intended to do," said Meidel. "We have
more employees here today at higher wages than when the incentive began."

Greg Rublee, an Oldsmar council member, said that Nielsen, by ending the tax
incentive agreement, has "prevented anyone from looking over their shoulder."

He criticized the H-1B visa program, saying it was never meant to be used as a
way to replace U.S. workers. While the Tata employees are supposed to be paid
prevailing wages, that pay doesn't account for retirement and other benefits
that U.S.-based employees receive. "IT people all over the country should be
fearful of this," he said.

+++++++++++++++++++++++++++++++++++++++++++++++++++

http://www.ci.oldsmar.fl.us/City_Clerk/PDFs/Minutes_2008/04_15_08_minutes.pdf

CITY COUNCIL MINUTES
Oldsmar Council Chambers
100 State Street West
Oldsmar, Florida
Date: Tuesday, April 15, 2008

17. Comments by Council Members:
Vale -- stated she heard the City Team did well for the Relay for Life.
Vale stated she is very upset
about the article in the St. Petersburg Times about Nielsen Media Research.
This company has received
a lot of money from the City, County and State that they should be made to pay
back. They are bringing in people from overseas and laying-off American
citizens. She is very angry about this and stated Nielsen is making a joke out
of the Tax Incentive program. Seidel asked if it is known that the article is
factual because he heard that Jerry Custin s comments were taken out of
context.
Seidel also stated this
practice is not good for our citizens, but, aside from the tax incentives, he
doesn t feel it is the Council s place to tell a company how to run their
business. He would like to know if the question about the tax incentive
dollars is correct or not. Ronecker stated they will get to the bottom of that
because Nielsen has to live up to their obligations. Vale stated that when
they were awarded this money, it was to provide decent paying jobs to U.S.
citizens. They are now bringing in foreign workers and Oldsmar residents are
being laid off. Rublee stated that if what has been reported turns out to be
true, Nielsen has abdicated their responsibility as a corporate citizen. The
human factor does matter. Miller stated she has been told that Nielsen is very
proud of the fact they received the money again this year by adding their
contract workers in to bring the numbers up. She was told they will be getting
rid of an additional 200-400 jobs and bringing in workers from India at $28.50
per hour, flat rate. Miller quoted the following governmental contributions:
City of Oldsmar $554,000; Pinellas County $700,000; State of Florida $1.8
million. Seidel suggested the Council invite a Nielsen representative to come
and speak.
The Council agreed to invite a representative to the May 20th Council meeting.

+++++++++++++++++++++++++++++++++++++++++++++++++++

http://www.ci.oldsmar.fl.us/City_Clerk/PDFs/Minutes_2004/01_06_04_minutes.pdf

CITY COUNCIL MINUTES
Oldsmar Council Chambers
100 State Street West
Oldsmar, Florida
Date: Tuesday, January 6, 2004

6. Approve Nielsen Media Research job creation incentive grant agreement --
Haddock stated the City adopted Resolution 2002-08 on March 13, 2002, creating
this program. The grant pays $500 per new job created that pays at least 150%
of the average Pinellas County wage, and $1,000 per new job created that pays
at least 200% of the average Pinellas County wage. The maximum value of the
grant cannot exceed 50% of the net new real estate taxes paid annually to the
City. Miller made a motion seconded by Caruso, to approve the Nielsen Media
Research job creation incentive grant agreement. ALL IN FAVOR? MOTION CARRIED
5:0 VOTE. Dan Johnson, Vice- President of Finance, Nielsen Media Research --
announced that Nielsen has received corporate approval to proceed with Phase 2
which will add $25-28 million to complete the campus.

+++++++++++++++++++++++++++++++++++++++++++++++++++

http://www.tampachamber.com/ed_incentives.asp

Tampa Chamber of Commerce

Qualified Target Industry Tax Refund (QTI)

The Qualified Target Industry Tax Refund incentive is available for companies
that create high wage jobs in targeted high value-added industries. This
incentive includes refunds on corporate income, sales, ad valorem, intangible
personal property, insurance premium, and certain other taxes. Pre-approved
applicants who create jobs in Florida receive tax refunds of $3,000 per net
new Florida full-time equivalent job created; $6,000 in an Enterprise Zone or
rural county. For businesses paying 150 percent of the average annual wage,
add $1,000 per job; for businesses paying 200 percent of the average annual
salary, add $2,000 per job. The local community where the company locates
contributes 20 percent of the total tax refund. There is a cap of $5 million
per single qualified applicant in all years, and no more than 25 percent of
the total refund approved may be taken in any single fiscal year. New or
expanding businesses in selected targeted industries or corporate headquarters
are eligible.

+++++++++++++++++++++++++++++++++++++++++++++++++++

http://www.pced.org/expansion_relocation/financial_services.asp

Pinellas County

Qualified Target Industry Tax Refund Program (QTI) This investment tool is
available for companies that create high wage jobs in targeted, high value-
added industries. This incentive returns a portion of taxes paid by the
business after the company meets its job creation and wage commitments. Pre-
qualified businesses receive tax refunds of $3,000 per net new-to-Florida job.
Additional "per job" bonuses are available for businesses paying 150 or 200
percent or more, of the average annual wage, or locating in enterprise zones
or Brownfield areas.

Job Creation Incentive Grant (JCIG)
This investment tool is available for companies that create jobs paying at
least 150% of the average county wage in targeted, high-value added
industries, with a capital investment of at least $50 million in Pinellas
County. The grant award is equal to $500 per new job created for jobs
paying 150% of the average county wage and $1,000 per new job created for
jobs paying 200% of the average county wage.

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