Panel: State needs more tools to recruit new business

Wednesday, September 13, 2017

by Molly Fleming

Journal Record

OKLAHOMA CITY – The state’s leaders who work on recruiting new businesses to Oklahoma will often hear a “No” from the prospect.

One reason is that other states can offer money at the last minute to get that business. It’s called a closing fund, and Oklahoma hasn’t put money in its fund in several years.

An Oklahoma Department of Commerce public information officer said at one time the fund had $9 million, but it is now down to $1.8 million. In Arkansas this year, the Legislature budgeted for $50 million in its closing fund.

“If there was more money in the closing fund, we would win more projects,” said Jon Chiappe, director of research and economic analysis for the Commerce Department.

He said projects that have used money from the closing fund are the Macy’s Fulfillment Center in Owasso and the GE Oil and Gas Technology Center in Oklahoma City. Macy’s used the money to cover training costs and GE used it for infrastructure.

Chiappe said he asks companies why they might say “No” to Oklahoma, and he can use the closing cost money to remedy those issues.

State Rep. Scott Fetgatter, R-Okmulgee, said he tried to put $5 million in the closing fund during the 2017 legislative session, but it was not approved. He’s going to ask for $10 million this year, and will continue to double the amount annually until the money is allocated.

Closing deals is only one looming issue that’s deterring economic development, including in rural Oklahoma. Fetgatter and state Rep. Rhonda Baker, R-Yukon, hosted an interim study on Wednesday to evaluate what’s hindering businesses from locating in rural Oklahoma.

Department of Commerce Deputy Secretary Jamie Herrera said the workforce is another issue, especially in southeast Oklahoma. In the state’s southeast corner, there’s a lack of people, and those residents that are there will have to be retrained. Herrera is on Gov. Mary Fallin’s task force that’s looking at how that training will be done.

The other issue Herrera hears about from prospective businesses is a lack of direct flights to Oklahoma City and Tulsa. Companies do not like that they have to go through Houston, Dallas, or Atlanta to get here.

“That is something we hear about frequently,” she said.

She encouraged the House of Representatives’ Business, Commerce, and Tourism Committee to support the state’s quality jobs acts. Without them, she said the state would lose more businesses to Arkansas because of its incentives package.

The three quality job acts will be reviewed in 2018 by the Incentive Review Commission. The commission started in 2017, looking at several incentives annually to see if they are creating a positive economic return for the state.

Lyle Roggow said his fight is with Mississippi, which was even more upsetting to Fetgatter since The Magnolia State often ranks lower on education ratings than Oklahoma. Roggow is the president of the Duncan Area Economic Development Foundation.

“I’ve lost several projects to Mississippi and it’s been over incentives,” he said.

The incentives were offered early in the process, and Roggow said he couldn’t touch them. His organization deals only with industrial-type job recruitment. The Duncan Chamber of Commerce handles retail.

Fetgatter asked what he could do for Roggow to help him beat Mississippi. The Magnolia State has a $475 million bond package it can use to lure businesses. Roggow said he’d like to have a targeted incentive. He tries to get manufacturing companies. For every $1 invested in manufacturing, there’s a $1.50 in return. The Quality Jobs Act has income thresholds, so manufacturing may not fit within it.

“Manufacturing is us,” he said. “If I had more tools for that, it would help me.”

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