Quality Jobs program pays out $54 million amid budget crunch

Backers say the incentive program helps create jobs and increase tax revenue in the long run, but some wonder if the costs are worth it.
BY PAUL MONIES Published: November 14, 2010
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Oklahoma's longtime economic development incentive for creating jobs paid $54 million in cash rebates to companies last year despite the state's budget crunch.

But economic development officials and some economists say that was money well spent for the Quality Jobs program, which began in 1994 and has been copied in other states.

Under the program, companies can receive quarterly cash rebates of up to 6 percent of payroll after creating jobs with health care benefits and above-average wages. A sister program helps small employers.

Among the largest claimants last year were some of Oklahoma's most high-profile employers, according to data from the state Tax Commission.

The owners of the NBA's Thunder basketball team received $5.28 million in Quality Jobs rebates, leading all companies. Dell Inc. received almost $3.7 million, while SandRidge Energy Inc. received $3.3 million. Spirit Aerosystems Inc., with factories in Tulsa and McAlester, had $2.4 million in rebates.

An expansion of the program, called 21st Century Quality Jobs, was instrumental in landing more than 550 new jobs at Boeing Co. in Oklahoma City. Those jobs upgrading the C-130 and B-1 military aircraft are coming from Long Beach, Calif.

The 21st Century Quality Jobs program allows rebates of up to 10 percent, but the new jobs must pay at least three times the average county wage. In Oklahoma County, that's about $94,400.

“When you compare all the things that companies compare, the incentives certainly made our business case for Oklahoma much, much stronger,” said Mike Emmelhainz, Boeing's site director for Oklahoma City. “This has been a solid location for a very long time, but the folks have worked hard in establishing themselves as a good place for Boeing to do business and maintain the Boeing reputation.”

Emmelhainz said the incentives helped Boeing's Oklahoma City location bid for expanded jobs within the company. That was important given the Pentagon's emphasis on keeping older aircraft serviceable in a tough budget environment.

“Given shrinking or flat budgets, your ability to go build new platforms and products gets tougher and tougher,” he said. “You have to keep your existing inventory of platforms operational and flying. They need the people that supply them to do it in the most cost-effective manner they can.”

Program is a model

Economic development incentives of all types have drawn scrutiny as the state's finances took a hit from the recession. Lawmakers placed a moratorium on several tax credits in the last legislative session. Although another budget hole is expected for the upcoming fiscal year, some are calling on the state to expand Quality Jobs and use it as a model for other state incentives.

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