Cincinnati.com just announced that a Fortune 400 company, Omnicare, is pulling up stakes in Covington, Kentucky and moving its headquarters across the river to downtown Cincinnati.
Five hundred Northern Kentucky jobs are going with the move. That means the city of Covington alone will lose hundreds of thousands in payroll tax income. The city is already saying the move will force it to rework its budget due to the large shortfall. As a state-located corporation, the move will also put a severe hit on the Kentucky State tax coffers, as well.
One really sad note: the news article says the Omnicare move was triggered in part by tax legislation in 2005 that created an extra tax burden. Despite that, Northern Kentuckians like Covington City Manager Larry Klein say they worked hard to keep Omnicare, but in the end it looks like those local efforts were outdone by short-sighted House legislators in Frankfort who wouldn’t pass a bill on job retention credits that was needed to sweeten the package.
Congratulations, Kentucky House. You just cost this state a huge source of tax revenue – a Fortune 400, (not 500, 400) company.
And, where was the leadership from the top to help keep this valuable company from moving on to greener pastures?
By the way, one of the reader comments to the news article is interesting, spelling errors and all (or did the reader refuse to capitalize Kentucky and Louisville on purpose to make a point, as Cincinnati IS capitalized??):
“This will be a double blow to kentucky, as Omnicare is purchasing louisville based PharMerica and will move those jobs from louisville to Cincinnati.”
If true, Louisville needs to wake up, as well.
So, here is a message for Frankfort. This state has one of the most business-hostile tax structures in the nation. Not only is that making it hard to attract new business, but now it is making it easier for other states to poach those businesses we do have here. Wake up!