Commerce incentives can bring prosperity to state
As someone who has worked in economic development for more than a decade, incentives are ingrained in my brain. They are an incredible tool for economic development and have played a role in bringing new jobs to the state, alongside billions of dollars in investment. But I’ve also been in this business long enough to know that their purpose and how they work is often misunderstood.
There are numerous benefits that make Oklahoma an enticing prospect for businesses. From our workforce training and our low cost of doing business to our strategic logistical advantages and business-friendly policies, companies look at our state as a potential location. And there are many tools in our economic development toolbox – incentives, workforce training programs, less governmental red tape, an involved executive branch and more.
Incentives can come from a variety of organizations: State funding, local funding and private investment are the main categories. These offerings stack on top of one another to create a mutually beneficial package for the community and the business.
The main commonality with the state’s economic development programs is that they are performance based. The process does not include handing over large sums of money when a company announces they’ll come to Oklahoma. Instead, our programs have verifiable metrics that must be met to be eligible. So, while a company may qualify for one amount of incentive award, they will only receive the full amount if they do what they said they would do — e.g. invest money, hire people, provide health insurance. In most cases, the exchange is revenueneutral or positive so that the state is not providing the company a larger benefit than it receives in return.
As stewards of the state, we work to make sure we’re using these state dollars in the best way. When a company is considering bringing jobs and/or investment to the state, we work with them on an incentive analysis. Companies provide information about what they do, the salaries they offer, their three- to five-year plans, etc., and our team analyzes that information and provides a rundown of which programs they might qualify for. From there, the company completes applications for the eligible incentive programs.
To further ensure that incentives are operating optimally, the state created the Incentive Evaluation Commission to evaluate the state’s incentive programs and make recommendations for improvement. Since 2015, the commission has evaluated more than 50 programs and Commerce has worked with the legislature to either modernize or, in some cases, repeal numerous programs.
A lot of research and analysis goes into the process of determining the amount of incentive offered that will protect the state while still providing an attractive offering to the company.
Oklahoma is poised for greatness with how we’ve diversified our economy, streamlined government spending, and modernized our incentive packages. By using the tools at our disposal, we can further strengthen our state. Together, we will continue to see new jobs and opportunities for Oklahomans, investments in our communities and the influx of new and talented people to the state.
Brent Kisling, executive director, Oklahoma Commerce Department.