State’s aerospace-related credits are well worth preserving

IS the State Chamber of Oklahoma being overly cautious in asking its members, as it did this week, to urge lawmakers to keep economic incentives in place for the aerospace industry? Perhaps. But better to be active now than surprised and disappointed later.

Tax credits have been the subject of considerable debate at the Legislature, particularly as the state’s economy has weakened and resulted in budget shortfalls totaling more than $2.5 billion in the past three years. The Legislature created a special panel to review and assess existing tax credits, and last year it voted unanimously to keep three aerospace-related credits in place.

That would seem to indicate the credits are safe, and that legislation being considered this session to extend them past their Dec. 31 expiration date will be met with lawmakers’ approval. But there are few sure bets where the Legislature is concerned, and thus the State Chamber’s pre-emptive strike makes sense.

The aerospace credits make sense, too. Created in 2008 to try to attract more engineers, the three credits have worked exactly as hoped since going into effect in 2010. Two of the credits can be claimed by employers, the third by qualifying engineers.

The credits have generated 4,200 jobs that pay about $80,000 per year and a 16.7 percent growth in aerospace engineering employment in the state — just the sort of high-tech jobs Oklahoma needs more of. The credits have generated economic output of $1.4 billion, and $287 million in employee wages.

The commission that reviewed these credits found that they had cost the state roughly $18.4 million in tax revenues since 2010, but that employment and economic activities spurred by the credits in that time generated $46.3 million of additional tax revenue. In 2014 alone, employment and economic activity generated by the program brought an additional $15 million in tax revenue to the state — almost twice as much as it cost in tax credits.

It’s not hyperbole to say Boeing’s considerable expansion in Oklahoma City in recent years is due in large part to these credits being available. Boeing officials noted the program last year at the dedication of their 800-employee research lab.

According to the state Department of Commerce, roughly 120,000 Oklahomans work for the 500-plus companies in the aerospace and defense industry. The Greater Oklahoma City Chamber notes that in the 10-county Oklahoma City region (and including Tinker Air Force Base), more than 36,000 people are employed in the aerospace industry at an average salary of nearly $73,000.

These are good jobs, and Oklahoma needs more of them. Keeping the aerospace tax credits in place will help to make that happen, just as they have so successfully for the past six years. Before the session adjourns at the end of May, lawmakers need to make sure to approve one of the bills ensuring that this worthwhile program is extended past this calendar year.