Questions Surround State Subsidies Aimed at Saving Jobs

By Warren Vieth

Oklahoma’s premier business incentive, the $1 billion Quality Jobs program, entered new territory nine years ago.

Until then, businesses only received payroll subsidies from the state if they created new jobs in Oklahoma.

In 2006, the program was expanded to begin providing subsidies for existing jobs if a “change in control” occurred and the Oklahoma Department of Commerce director determined the jobs were “likely to leave the state” because of new ownership.

Since then, nine companies have collected $20 million in state payments for preserving existing jobs, at least for a while.

State officials and some lawmakers say the change-in-control provision was a good idea. They cite examples such as Holly/Frontier Refining and Marketing Corp., which has kept more than 500 Tulsa-area refinery workers employed since it began receiving subsidies in 2010.

But several officials and independent analysts say a lack of transparency makes it virtually impossible to verify claims that the jobs were really in danger of leaving Oklahoma and that the state isn’t just subsidizing private-sector jobs that would have existed anyway.

“If that program is going to go forward, it’s going to be essential that it finds a method by which there can be independent verification,” said Rep. Jason Murphey, R-Guthrie. “Because without it, it simply doesn’t have credibility.”

An investigation by Oklahoma Watch, based on data gathered by Mark Lash, a retired federal agency program manager, calls into question the state’s conclusion that none of the subsidized jobs would exist if not for the incentives:

* Holly/Frontier received its Quality Jobs contract seven months after buying one Tulsa refinery and one month after buying a second. It said nothing publicly about the deals being contingent on a Quality Jobs subsidy. The company that sold the first refinery said the deal would preserve jobs. Total incentives provided so far: $13.5 million.

* Zeledyne LLC received $2.3 million in Quality Jobs incentives after buying a glass factory in Tulsa from Ford Motor Co. Zeledyne stated at the onset it planned to keep the Tulsa plant operating. It eventually shut it down. More than 500 jobs were lost.

Lash has been gathering data on the Quality Jobs program for two years. He shared his data with Oklahoma Watch, which also analyzed and fact-checked the data, conducted the interviews and generated the story.


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