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OKG Newsletter


Looking at Oklahoma's Quality Jobs Act

By Scott Cooper April 9th, 2008

A careful review of the state's Quality Jobs Act database provides interesting fodder for those questioning the effort to make the Sonics basketball team eligible for the program.

As stated in Gazette today, QJA has doled out more than half a billion dollars since its inception in 1993. More than 500 companies have taken advantage of the program, some to the tunes of tens of millions of dollars.

The Air Logistics Center at Tinker Air Force has benefited the most, earning $36.9 million in rebate checks. Should the Sonics move to Oklahoma City, the Legislature approves amending QJA, the franchise could earn up to $60 million.

When broken down on a per job basis, Level 3 Communications in Tulsa has fared the best getting $192,614 for every job the company created. Again, the Sonics would far surpass that figure with $352,941 per job by bringing 170 jobs to Oklahoma, according to figures provided by the Legislature.

But some questions pop up when looking at the data, questions I am still waiting on the state Department of Commerce to answer.

Several companies are listed more than once. Commercial Financial Services first entered the program in 1996 and earned $8.3 million in rebates within three years. The company based in Tulsa qualified for the program a second time in 1997, picked up another $1.3 million rebate by 1999.

The reason the company got out of the program after only a few years was because it came to resemble the Enron of Oklahoma. The debt collecting company was playing fast and loose with its financial statements and filed for bankruptcy. At the time, CFS had nearly 4,000 employees.

IBM has been in the program three times. The first time came in 1995 and the last time was 2006. So far, IBM has received $11.8 million from QJA.

How a company can qualify for the program more than once, occasionally at the same time, has yet to be answered by the Commerce department.

The list of companies in the program reads like a who's who of American business. American Airlines, America Online, The Boeing Company, ConocoPhillips, Dell computers, General Mills, OfficeMax, Southwest Airlines, Tyson (foods), Whirlpool and everybody's favorite company in war time - Halliburton.

One other note of interest, many companies get into the program and are out within three years. One reason is the $2.5 million payroll threshold companies must meet. They have three years to meet the threshold or be kicked out of the program. Fifteen companies specifically failed to meet the threshold and were removed. But another 60 companies were ousted for unknown reasons other than failing to meet the terms of the QJA contract with the state.

The Oklahoma Tax Commission reviews the company's compliance with the contract, and has full discretion to kick a company out if the terms are not met. But the company gets to keep the money they were rebated.

The question is has QJA more benefited the state or the companies? If you view the situation as the state lost money that was owed, then the answer would be the companies. If you see bringing jobs to Oklahoma, regardless of pay, as the important factor, then the answer is the state.

The debate will continue as the Sonics inch closer to Oklahoma City. - Scott Cooper

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