Prometheus 6

Other projects that sounded great on paper, such as the Nortel expansion plan, have fallen far short of what was promised. A Fall River rubber parts maker pledged to create 20 jobs, but cut 36 instead. A manufacturer in Orange promised to add five full-time jobs, but cut a half-dozen or more instead. But even when jobs are cut, the state often takes years to end a tax break, if it takes any action at all. And officials could not name a case in which they asked a company to repay subsidies already pocketed.

“Oversight is practically nonexistent,’’ said Neil Cohen, Massachusetts’ deputy inspector general, whose office has been critical of the program in the past. “The state must ensure that it is getting something for what amounts to an investment.’’

Jobs program lost its way — and tax money
Millions have been spent on tax breaks for businesses that promised to create jobs. But in hundreds of cases, few or none resulted, yet companies kept the savings
By Todd Wallack, Globe Staff  |  March 14, 2010

First of two parts

BILLERICA — The blue sign on the building says Nortel Networks, but it might as well be “Your tax dollars at work.’’

In exchange for more than $2 million in state and local tax breaks, the Canadian telecommunications equipment maker promised a decade ago to expand its campus in Billerica, keeping 2,200 existing jobs and adding as many as 800 more. But instead of adding jobs, the struggling company has steadily slashed its operations for years.

Today, it has 145 employees. It also still has those tax breaks, set to continue through 2014.

And Nortel, amazingly, is by no means an isolated case.

Over the past 16 years, Massachusetts has given away hundreds of millions of dollars in state and local tax breaks for more than 1,300 development projects under its Economic Development Incentive Program, which aims to encourage companies to invest here and create jobs. Often the incentives work and new jobs result. But far too often taxpayers have not come close to getting their money’s worth, a Globe review has found.

Hundreds of the projects delivered fewer jobs than promised, and some companies actually slashed employment. Many firms won subsidies for projects they were set to build without state assistance; in some cases, incentives that were approved long after the projects were underway or complete. And many got generous packages though they agreed to create only a handful of low-paying jobs.

A review of state records found that more than 40 percent of the companies that received tax breaks pledged to create 10 full-time jobs or fewer, including nearly four dozen that promised only to add one full-time job. Often, the companies planned to pay new workers little more than minimum wage.