Rep. Eric Proctor, D-Tulsa, plans to introduce a bill when the Oklahoma Legislature reconvenes on Monday that would block companies that outsource jobs to foreign countries from receiving incentive payments through the state's Quality Jobs Program.
Proctor has attempted to have similar legislation passed in the Oklahoma Legislature for the past three years but says his efforts have been blocked by the lobbying efforts of the State Chamber of Oklahoma.
“Unfortunately, a lot of these companies that this would affect write big checks to political campaigns and are members of the State Chamber of Commerce,” Proctor said.
This year, he also plans to introduce a companion bill that would require companies to have military veterans make up 10 percent of new hires to receive Quality Jobs money.
“I would much rather companies hire veterans than create jobs in India or China,” Proctor said.
The State Chamber has opposed Proctor's efforts to reform the Quality Jobs Program because the proposed legislation has been overly broad, said Mike Seney, senior vice president for policy analysis and strategic planning for the chamber.
“We have about 30,000 workers in the state who are receiving a paycheck from companies that are domiciled somewhere else,” Seney said. “We live and work in a global economy. That means many of our companies have operations somewhere else in the world.”
The Quality Jobs Program has been one of the state's banner economic development programs for the past two decades.
Since its inception in 1993, the program has secured more than 650 job-creation deals with new, relocating or expanding companies. The program has paid more than $725 million in wage rebates.
Companies enrolled in the program can get up to a 5 percent rebate on their payroll taxes for up to 10 years in exchange for the creation of jobs.
Companies have to create a minimum $2.5 million in new payroll within three years to qualify for Quality Jobs payments. Businesses enrolled in the program must also meet minimum wage and benefit requirements.
Proctor claims that from 2000 to 2010, more than $110 million in payroll tax rebate money from the Quality Jobs Program has gone to companies that have outsourced jobs overseas.
Is program flawed?
Economist Mickey Hepner, dean of the College of Business Administration at the University of Central Oklahoma, believes the Quality Jobs Program is essentially flawed, because the state is paying companies for jobs they would have added to their businesses anyway.
“It's not really creating new jobs — a lot of these jobs would have been here to begin with,” he said.
The Quality Jobs Program lacks a clawback provision that would require companies to return state money if they later lay off workers.
However, the state doesn't give money to companies up front — the jobs have to be created before the incentive money is given, said Don Hackler, deputy director for the Oklahoma Department of Commerce, which vets applications from businesses to participate in the Quality Jobs Program.
The program has created more than $15.9 billion in new payroll in the state since it began through 2011, according to the most recent data from the Commerce Department.
“It is a performance-based program,” Hackler said. “They enter into a contract with us, and if their business takes a nose-dive, they never get a penny from the state.”