Waste Watch: Is the state vastly over selling "Quality Jobs" rewards?
It has cost the state a billion dollars over the last decade and the program shows no signs of slowing down. But critics of one of the state's biggest incentives programs question if it missing the mark and costing the state more than it is bringing in. The quality jobs program started to give the state the ability to compete for big companies looking to relocate, but that is far from all that the program provides today. Millions of dollars in incentive payments go to companies that are already in Oklahoma and pay for private businesses to expand. "There's probably not a legislator who walks into the building, Republican or Democrat, and thinks that they wanted to go in there and give private sector businesses tax payer dollars to incentivize them ," said State Senator David Holt, R-Bethany. Senator Holt may not like the idea of incentives, but finds himself a reluctant supporter of the Quality Jobs Program. "It's not bad as far as these things go," Holt told Fox 25, "Everybody holds their nose and votes for these things like the Quality Jobs Act; but it's not too bad but I think there are always ways to improve it." Quality jobs is one of the programs that takes money off the top of state revenue. The state is now facing a more than $600 million budget shortfall and the governor has called for a review of tax credits and incentive programs. "I think what I've been arguing for a number of years now is that we are consistently over selling or overstating the benefits of the state's quality jobs program," said economist Dr. Mickey Hepner, Dean of the College of Business at the University of Central Oklahoma. "We see companies that are creating jobs that they otherwise would have created getting rebates on those jobs they would have created otherwise," Dr. Hepner said. Put simply if a company is planning to expand and add 100 jobs, the five percent incentive they get from the state could pay for an additional five employees. However, the company gets to claim 105 jobs for Quality Jobs and the state gets to boast all the jobs were created by the program; when in reality, according to economists, tax credits really only created five new jobs. "In the 90s they were pretty detailed," said Mark Lash about the state's own analysis of the program, "They were really taking a hard look at the program some of them were wondering if this was really an incentive program anymore or simply a reward, those are their own words from their report." Lash is a retired federal worker who began looking into state incentives and he says the the state's own analysis when the program started was much more critical than current reviews in terms of how many jobs were actually created due to tax incentives. Lash said the program has now grown far beyond the original legislative intent to include a number of new company categories that can claim tax credits. "They weren't even part of the program when it was created by the legislature and now they are and they're taking half the money," Lash said. "Using it to attract out of state jobs that otherwise may not come to this place might well be more reasonable, but using it to reward companies that are expanding that would have otherwise would have expanded anyway is, from an economic perspective, less economically viable," Dr. Hepner said. "That's the difficulty of having it applicable to instate existing companies, but if you don't do that then it's unfair," Senator Holt explained of the political balancing act that has to happen with incentive programs. In the end, economists say incentives play less of a role in attracting and growing business than quality of life. "The most significant economic development activity that has occurred in the state of Oklahoma in the last half century has occurred in Oklahoma City," Dr. Hepner said, "And it came about not because we cut taxes but because we raised them to invest in infrastructure to invest in education to invest in our future."For part one of this report go to: Quality Jobs numbers investigated