FedEx credits tax cuts for $1.5 billion expansion of Indianapolis hub

FedEx is crediting the Republican tax cuts for its plans to invest $1.5 billion into its Indianapolis shipping hub, the company announced Friday.

The Memphis-based carrier said it will expand its hub at the Indianapolis International Airport over the next seven years, though a representative reached by IndyStar declined to provide details on the scope of the project or potential new jobs created.

Mayor Joe Hogsett said Friday that he applauded FedEx's decision to continue investing in Indianapolis.

"For three decades, FedEx and Indianapolis have had a dynamic partnership, and the continued growth of this hub speaks volumes to Central Indiana’s business friendly climate," Hogsett, a Democrat, said in a written statement.

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The 2-million-square-foot Indianapolis facility opened in 1988 and is the second largest of the company's hubs. It employs about 700 full-time and 3,000 part-time workers and can sort more than 2 million packages a day.

The Indianapolis Airport Authority is "thrilled with the announcement of FedEx’s significant investment to expand their hub in Indianapolis," Executive Director Mario Rodriguez said in a written statement.

Late last year, FedEx announced plans to build a $259 million distribution plant in Greenwood. Described as a "hub spinoff" of the company's Northern Kentucky Hub, the proposal included 80 full-time jobs paying $24.55 an hour and 375 part-time jobs paying $14.24 an hour.

The Indianapolis announcement was among three commitments FedEx on Friday said it will undertake in the wake of the tax cuts. The company said it will invest more than $200 million to give employees raises in April, six months earlier than usual. Two-thirds of the compensation money will fund raises for hourly employees. The rest will go to raises based on performance. And FedEx said it will contribute $1.5 billion to its pension plan.

Signed into law Dec. 22 by President Trump, the GOP tax plan slashed the corporate tax rate from 35 percent to 21 percent and resulted in a flurry of bonus and reward-sharing announcements from companies across the country.

Supporters said the cost of reducing tax collections by $1.5 trillion over the next 10 years would be offset by an explosion of economic growth, but economists said at best that growth will cover one-third of the cost. Non-partisan estimates projected the tax cut could add $1 trillion to the national debt over 10 years.

U.S. Rep. Todd Rokita, a Republican vying this year for Democrat Joe Donnelly's seat in the U.S. Senate, on Friday praised the effects of the tax cuts in Indiana.

"This $1.5 billion investment in Indiana from FedEx is a testament to President Trump's tax cuts and what happens when you unleash economic growth," Rokita said in a written statement.

USA TODAY contributed to this article.

Call IndyStar reporter Holly Hays at (317) 444-6156. Follow her on Twitter: @hollyvhays.

Call IndyStar reporter Vic Ryckaert at (317) 444-2701. Follow him on Twitter: @VicRyc.